Birkeland was born in Christiania (Oslo today) and wrote his first scientific paper at the age of 18. Birkeland married Ida Charlotte Hammer in May 1905, they had no children and due to Birkeland's work, they finally divorced in 1911. Suffering from severe paranoia due to his use of Veronal as a sleeping aid, he died under mysterious circumstances in his room in the Hotel Seiyoken in Tokyo while visiting colleagues at the University of Tokyo. A post-mortem revealed that Birkeland had taken 10g of veronal the night he died, instead of the 0.5g recommended. The time of death was estimated at 7am on 15 June, 1917. Some authors have claimed that he committed suicide.

He organized several expeditions to Norway's high-latitude regions where he established a network of observatories under the auroral regions to collect magnetic field data. The results of the Norwegian Polar Expedition conducted from 1899 to 1900 contained the first determination of the global pattern of electric currents in the polar region from ground magnetic field measurements. The discovery of X-rays inspired Birkeland to develop vacuum chambers to study the influence of magnets on cathode rays. Birkeland noticed that an electron beam directed toward a magnetised terrella was guided toward the magnetic poles and produced rings of light around the poles and concluded that the aurora could be produced in a similar way. He developed a theory in which energetic electrons were ejected from sunspots on the solar surface, directed to the Earth, and guided to the Earth's polar regions by the geomagnetic field where they produced the visible aurora.

The scale of Birkeland's research enterprises was such that funding became an overwhelming obstacle. Recognizing that technological invention could bring wealth, he developed an electromagnetic cannon and, with some investors, formed a firearms company. The coil-gun worked, except the high muzzle velocities he predicted (600 m/s) were not produced. The most he could get from his largest machine was 100 m/s, corresponding to a disappointing projectile range of only 1 km. So he renamed the device an aerial torpedo and arranged a demonstration with the express aim of selling the company. At the demonstration, one of the coils shorted and produced a sensational inductive arc complete with noise, flame, and smoke. This was the first failure of any of the launchers that Birkeland had built. It could easily have been repaired and another demonstration organized.

However, fate intervened in the form of an engineer named Sam Eyde. At a dinner party only one week later, Eyde told Birkeland that there was an industrial need for the biggest flash of lightning that can be brought down to Earth in order to make artificial fertilizer. Birkeland's reply was, "I have it!" There were no more attempts to sell the firearms company, and he worked with Eyde only long enough to build a plasma arc device for the nitrogen fixation process. The pair worked to develop the prototype furnace into a design that was economically viable for large-scale manufacture. The resulting company, Norsk Hydro, hugely enriched Norway, and Birkeland then enjoyed adequate funding for research, his only real interest.

The fact that Birkeland joined with Eyde as a business partner appears to have been one of the reasons why Birkeland was unsuccessful in being awarded the Nobel Prize for his idea. Eyde wanted to be nominated along with Birkeland; however, the Nobel Prize is designed to recognise the original idea, not any commercial applications. This resulted in a possibly contentious nomination, and this combined with the fact that at that time relations between Sweden and Norway were delicate, meant that he wasn't nominated by the committee.

In 1913, Birkeland may have been the first to predict that plasma was ubiquitous in space. He wrote: "It seems to be a natural consequence of our points of view to assume that the whole of space is filled with electrons and flying electric ions of all kinds. We have assumed that each stellar system in evolutions throws off electric corpuscles into space. It does not seem unreasonable therefore to think that the greater part of the material masses in the universe is found, not in the solar systems or nebulae, but in 'empty' space."

In 1916, Birkeland was probably the first person to successfully predict that the solar wind behaves as do all charged particles in an electric field: "From a physical point of view it is most probable that solar rays are neither exclusively negative nor positive rays, but of both kinds" In other words, the Solar Wind consists of both negative electrons and positive ions.

Birkeland suggested that polar electric currents -- today referred to as auroral electrojets -- were connected to a system of currents that flowed along geomagnetic field lines into and away from the polar region. He provided a diagram of field-aligned currents in his book, The Norwegian Aurora Polaris Expedition 1902-1903. This book contains chapters on magnetic storms on the Earth and their relationship to the Sun, the origin of the Sun itself, Halley's comet, and the rings of Saturn. Birkeland's vision of field-aligned currents became the source of a controversy that continued for a quarter of a century, because their existence could not be confirmed from ground-based measurements alone. The proof of Birkeland's field-aligned currents could come only from observations made above the ionosphere with satellites. A magnetometer on board a U.S. Navy navigation satellite launched in 1963 observed magnetic disturbances on nearly every pass over the high-latitude regions of the Earth. The magnetic disturbances were originally interpreted as hydromagnetic waves, but it was soon realized that they were due to field-aligned or Birkeland currents. The first complete map of the statistical location of Birkeland currents in the Earth's polar region was developed in 1974 by A.J. Zmuda and J.C. Armstrong and refined in 1976 by T. Iijima and T.A. Potemra.