He was born in Oslo. After getting a cand.philol. degree from the University of Oslo in 1945, he went to the United States, receiving a Ph.D. in Psychology from the University of Chicago in 1952. Back in Norway, he joined the Department of Psychology at the University of Oslo, rising to docent in 1962 and full professor in 1967. He retired in 1990. Saugstad has done important research in several areas, such as visual perception, thinking, and language. Among his books are An inquiry into the foundations of psychology (1965), A Theory of Communication and Use of Language. Foundations for the Study of Psychology (1977), A Theory of Language and Understanding (1980) and Language: A theory of its structure and use (1989). In later years, he has been working mainly on the history of psychology, releasing the book Psykologiens historie in 1998. A second edition was finished in 2009. He was a member of the Finnish Academy of Science and Letters.