Dimanstein was born in Sebezh, Vitebsk Governorate (today Pskov Oblast) in a poor Litvak family.
He was a signatory of the “Manifesto of the Provisional Revolutionary Workers Government of Lithuania.” Until the summer of 1919, he served as Commissar of Labor in the short-lived Lithuanian–Byelorussian Soviet Socialist Republic.
He served for a time as spokesperson for Commissar Joseph Stalin, and edited and contributed many articles to the Commissariat's journal, Zhizn' Natsional'nostei ("Life of the Nationalities").
He was also founder and editor of the Communist Yiddish newspaper "Di Varhayt," later renamed Der Emes ("The Truth").
In 1924 he returned to Moscow and was appointed Deputy Head of Agitprop of the Central Committee of the Communist Party of the Soviet Union.
Dimanstein was a founding member of KOMZET, a government agency created in 1924 to promote Jewish agricultural work.
From October 1936, Dimanstein was one of the editors of Forpost, a Yiddish journal in the Jewish Autonomous Oblast's capital city of Birobidzhan.