O'Higgins was born in the Chilean city of Chillán in 1778, the illegitimate son of Ambrosio O'Higgins, 1st Marquis of Osorno, a Spanish officer born in County Sligo, Ireland, who became governor of Chile and later viceroy of Peru. His mother was Isabel Riquelme, a prominent local lady and daughter of Don Simón Riquelme y Goycolea, a member of the Chillán Cabildo, or council. O'Higgins spent his early years with his mother's family in central-southern Chile, and later he lived with the Albano family in Talca, who were his father's commercial partners. Aged 15, Bernardo was then sent to Lima by his father. Bernardo had a distant relationship with Ambrosio, who supported him financially and was concerned with his education, but the two never met in person. It is unclear why his father did not marry Isabel. High-ranking Spanish government officials in America were forbidden to marry locals, but at the time of Bernardo's birth Ambrosio O'Higgins was only a junior military officer. It has been suggested that Isabel's family would not have seen the match as advantageous at the time. Two years later she would marry Don Félix Rodríguez, an old friend of her father's. In any event, Bernardo used his mother's surname until the death of his father in 1801.

Ambrosio O'Higgins continued his professional rise and became Viceroy of Peru; at seventeen Bernardo was sent to London to complete his studies. There, studying history and the arts, Bernardo became acquainted with American ideas of independence and developed a sense of nationalist pride, coming to admire liberalism in the Georgian British model. He also met Venezuelan Francisco de Miranda, an idealist and believer in independence, and joined a Masonic Lodge established by Miranda, dedicated to achieving the independence of Latin America.

In 1798, Bernardo went to Spain from England, his return to the Americas delayed by the wars and the British capture of the first ship he sailed with. His father died in 1801, leaving Bernardo a large piece of land, the Hacienda Las Canteras, near the Chilean city of Los Angeles. Bernardo returned to Chile in 1802, adopted his father's surname, and began life as a gentleman farmer. In 1806, O'Higgins was appointed to the cabildo as the representative of Laja. Then, in 1808 Napoleon took control of Spain, triggering a sequence of events in South America. In Chile, the commercial and political elite decided to form an autonomous government to rule in the name of the imprisoned king Ferdinand VII - this was to be one of the first in a number of steps toward national independence, in which O'Higgins would play a leading role. On September 18, 1810, O'Higgins joined the revolt against the now French-dominated Spanish government. The criollo leaders in Chile did not support Joseph Bonaparte's rule in Spain and a limited self-government under the Government Junta of Chile was created with the aim of restoring the legitimate Spanish throne. This date is now recognized as Chile's Independence Day. O'Higgins was a close friend of Juan Martínez de Rozas, an old friend of his father, and one of the more radical leaders. O'Higgins strongly recommended the creation of a national congress and was elected a deputy to the first National Congress of Chile in 1811 as a representative of the Laja district. Tensions between the royalist and increasingly pro-independence factions, to which O'Higgins remained attached as a junior member, continued to grow.

The anti-Royalist camp in Chile was deeply split along lines of patronage and personality, by geography - between the rival regional groupings of Santiago and Concepción - and by political beliefs. The Carrera family had already seized power several times in different coups, and stood for a specifically Chilean nationalism, as opposed to the broader Latin American focus of the Lautaro Lodge grouping, including O'Higgins and the Argentinian José de San Martín. José Miguel Carrera, the most prominent member of the Carrera family, enjoyed a power base in Santiago; de Rozas', and later O'Higgins', lay in Concepción. As a result, O'Higgins was to find himself increasingly in political and military competition with José Miguel Carrera - although early on, O'Higgins was nowhere near as prominent as his later rival. De Rozas initially appointed O'Higgins to a minor military position in 1812, possibly because of his illegitimate origins, poor health, or lack of military training. Much of O'Higgins' early military knowledge stemmed from Juan Mackenna, another immigrant of Irish descent and a former client of Ambrosio's, whose advice centered mainly on the use of cavalry. So in 1813, when the Spanish government made its first attempt to reconquer Chile, sending an expedition led by Brigadier Antonio Pareja, Carrera, as a former national leader and now commander in chief of the army, was by far the more prominent figure of the two and a natural choice to lead the military resistance.

O'Higgins was back on his estates in Laja, having retired from the army the previous year due to poor health, when news came of the invasion. O'Higgins mobilised his local militia and marched to Concepcion, before moving onto Talca, meeting up with José Miguel Carrera who was to take command of the new army. Carrera sent O'Higgins to cut the Spanish off at Linares; O'Higgins' victory there resulted in his promotion to colonel. The unsuccessful Siege of Chillan followed, where O'Higgins produced a brave but unspectacular, performance; Carrera, however, as commander took most of the blame for the defeat, weakening his prestige with the junta back in Santiago. O'Higgins continued to campaign against the royalists, fighting with a reckless courage that would make him famous. Then in October, fighting at the battle of El Roble under Carrera, O'Higgins took effective command at a crucial moment and gave one of his more famous orders: "Lads! Live with honor, or die with glory! He who is brave, follow me!" Despite being injured, O'Higgins went on to pursue the royalist forces from the field. The junta in Santiago reassigned command of the army from Carrera, who had retreated during the battle, to O'Higgins, who then appointed Juan Mackenna commandant general. Carrera was subsequently captured and imprisoned by the Royalist forces, and in his absence O'Higgins supported in May 1814 the Treaty of Lircay, which promised a halt to the fighting. Once released, however, Carrera violently opposed both O'Higgins' new role and the treaty and overthrew the junta in a coup in July 1814, immediately exiling Juan Mackenna.

O'Higgins turned to focus on Carrera and their forces met at the battle of Las Tres Acequias, where Luis Carrera inflicted a modest defeat on O'Higgins. Further conflict was postponed by news that the royalists had decided to ignore the recent treaty and were threatening Concepción under the leadership of General Mariano Osorio. Carrera and O'Higgins decided to reunite the army and face the common threat. Carrera's plan was to draw the Spaniards to the Angostura del Paine, while O'Higgins preferred the town of Rancagua. It was settled to make a stand at the Angostura de Paine, a gorge that formed an easily defended bottleneck. At the last hour, however, O'Higgins instead garrisoned the nationalist forces at the main square of Rancagua. Carrera did not arrive with reinforcements, and O'Higgins and his forces were promptly surrounded in October. After an entire day of fighting at the battle of Rancagua the Spanish commander Mariano Osorio was victorious, but O'Higgins managed to break out with a few of his men, issuing the command: "Those who can ride, ride! We will break through the enemy!"

Like Carrera and other nationalists, O'Higgins retreated to Argentina with the survivors and remained there for three years while the royalists were in control. Juan Mackenna, still a key supporter, was killed by Luis Carrera in a duel in 1818, deepening the ongoing feud. Whilst O'Higgins was undoubtedly a brave soldier, indeed often bordering on the reckless, and an inspirational commander, his qualities as a tactician have been questioned, both by his contemporaries and since. While in exile, O'Higgins met the Argentinean General José de San Martín, a fellow member of the Lautaro Lodge, and together the men returned to Chile in 1817 to defeat the royalists. Initially the campaign went well, with the two commanders achieving a victory at the battle of Chacabuco. Characteristically, O'Higgins defied the orders he had been given, deciding to charge the centre of the Spanish line with his 1,500 soldiers. A supporting flank attack meant that O'Higgins' men overwhelmed the Spanish forces and broke through the lines. The result was a decisive victory: 132 nationalist soldiers had died in total, but 500 Spanish soldiers lay killed and 600 taken captive. The second battle of Cancha Rayada in 1818, however, was a victory for the Royalists, and it was not until the battle of Maipú that ultimate victory was assured.

San Martín was initially offered the position of power in the newly free Chile but he declined in order to continue the fight for independence in the rest of South America. O'Higgins accepted the position instead and became the leader of an independent Chile. He was granted dictatorial powers as Supreme Director on February 16, 1817. On February 12, 1818, Chile was proclaimed an independent republic through the Chilean Declaration of Independence.

Throughout the war with the royalists, O'Higgins had engaged in an ongoing feud with José Miguel Carrera. After their retreat in 1814, O'Higgins had fared much better than Carrera, who found little support forthcoming from José de San Martín, O'Higgins political ally. Carrera was imprisoned to prevent his involvement in Chilean affairs; after his escape, he ended up taking the winning side in the Argentine Federalist war, helping to defeat the pro-San Martin government in 1820. Marching south to attack O'Higgins, now ruler of Chile, Carrera was arrested by supporters of O'Higgins and executed under questionable circumstances in 1821; his two brothers had already been killed by royalist forces in the preceding years, bringing the long-running feud to an end. The argument as to the relative contribution of these two great Chilean independence leaders, however, has continued up to the modern day, and O'Higgins' decision not to intervene to prevent the execution was to colour many Chileans' views of his reign.

For six years, O'Higgins was a largely successful leader, and his government initially functioned well. Within Chile, O'Higgins established markets, courts, colleges, libraries, hospitals and cemeteries, and began important improvements in agriculture. He also undertook various military reforms. He founded the Chilean Military Academy in 1817, aiming to professionalise the officer corps. O'Higgins remained concerned about the threat of invasion, and had declared after the battle of Chacabuco that "this victory and another hundred shall be of no significance if we do not gain control of the sea". Alongside the Military Academy, he founded the modern Chilean Navy under the command of the Scottish officer Lord Thomas Cochrane, establishing the First National Fleet, the Academy for Young Midshipmen (the predecessor of the current Naval Academy) and the Chilean Marine Corps. O'Higgins continued in his desire to see independence across Latin America, utilising his new forces to support José de San Martín, sending an expedition to assist in the liberation of Peru.

In time, however, O'Higgins began to alienate important political groupings within the still fragile Chilean nation. O'Higgins proposed radical and liberal reforms, (such as the establishment of democracy and abolition of titles of nobility) were resisted by the powerful large landowners. He offended the church in Chile early on, in particular the Bishop of Santiago, Jose Rodriguez Zorrilla. Having offended the aristocracy and the church, he also lost the support of the business people, his last semi-powerful ally within the country. The government became bankrupt, forcing O'Higgins to send Antonio José de Irisarri to England to negotiate a £1 million loan - Chile's first foreign debt - whilst a massive earthquake in central Chile added more difficulty for the ruler. In 1822, O'Higgins established a new "controversial" constitution, which many regarded as a desperate attempt to hang on to power. The deaths of his political enemies, including Carrera and Manuel Rodríguez, returned to haunt him, with some accusing him of abusing state power. The provinces increasingly viewed him as centralising power to an excessive degree.

O'Higgins was finally deposed by a conservative coup on January 28, 1823. Chile's new dictator, Ramón Freire, formerly O'Higgins' "closest ally", had slowly turned against O'Higgins in the preceding years. Freire had fought under O'Higgins at the battle of Maipú, was promoted to colonel for his services to the independence, and finally named Intendant of Concepción. His friendship with O'Higgins started to crack by degrees, however, until in 1822 he resigned his position in disagreement. His name became a rallying point for the discontents with O'Higgins, but the two of them never came to an armed conflict. O'Higgins' abdication was typically dramatic - baring his chest, he offered up his life should his accusers demand it of him. In return, the junta declared they held nothing against O'Higgins and saluted him. Initially, O'Higgins was briefly made governor of Conception, an appointment which did not last long: it was time for O'Higgins to leave Chile.

After being deposed, O'Higgins embarked from the port of Valparaiso in July 1823, in the British corvette Fly, never to see Chile again. Originally he had intended to return to Ireland, but whilst passing through Peru he was strongly encouraged by Simón Bolívar to join the nationalist effort there. Bolívar's government granted O'Higgins the Hacienda de Cuiva and the Hacienda Montalván in San Vicente de Cañete, near Lima. O'Higgins lived in exile for the rest of his life accompanied by his illegitimate son, Pedro Demetrio O'Higgins, his mother and his half-sister Rosa Rodriguez Riquelme. According to one recent documentary, Bernardo O'Higgins also had a daughter, Petronila, by Patricia Rodríguez. As his father Ambrosio had done, Bernardo O'Higgins never acknowledged any of his children. O'Higgins travelled to join Bolívar's army in its final liberation of Peru, but on arrival found that Bolivar did not intend to give him a command, instead appointing him a general of Gran Colombia and making him a special court-martial judge for Chilean volunteers. Making his way back to Lima, O'Higgins heard in due course of Bolivar's victory at the battle of Ayacucho. He returned to Bolivar for the victory celebrations, but as a civilian. "Señor," he toasted, addressing Bolívar, "America is free. From now on General O'Higgins does not exist; I am only Bernardo O'Higgins, a private citizen. After Ayacucho, my American mission is over."

When Andrés de Santa Cruz became head of the Peru-Bolivian Confederation in 1836, O'Higgins endorsed his integrationist policies, and wrote a letter of support to him the following year when the Confederation came under attack from the Chilean forces of Diego Portales, ultimately offering to act as a mediator in the conflict. With the rise of Agustín Gamarra, O'Higgins found himself out of favour in Peru. Meanwhile, the Chilean government had begun to rehabilitate O'Higgins, reappointing him to his old rank of captain-general in the Chilean army. In 1842, the National Congress of Chile finally voted to allow O'Higgins to return to Chile. After travelling to Callao to embark for Chile, however, O'Higgins began to succumb to cardiac problems and was too weak to travel. His doctor ordered him to return to Lima, where on 24 October 1842, aged 64, O'Higgins died.