Hahn was the youngest son of Heinrich Hahn (1845–1922), a prosperous glazier and entrepreneur ("Glasbau Hahn"), and Charlotte Hahn, née Giese (1845–1905). Together with his brothers Karl, Heiner and Julius, Otto was raised in a sheltered environment. At the age of 15, he began to take a special interest in chemistry and carried out simple experiments in the laundry room of the family home. His father wanted Otto to study architecture, as he had built or acquired several residential and business properties. But Otto persuaded him that his ambition was to become an industrial chemist.

In 1897, after taking his Abitur at the Klinger Oberrealschule in Frankfurt, Hahn began to study chemistry and mineralogy at the University of Marburg. His subsidiary subjects were physics and philosophy. Hahn joined the Students' Association of Natural Sciences and Medicine, a student fraternity and a forerunner of today's Nibelungia Fraternity. He spent his third and fourth semester studying under Adolf von Baeyer at the University of Munich. In 1901, Hahn received his doctorate in Marburg for a dissertation entitled On Bromine Derivates of Isoeugenol, a topic in classical organic chemistry. After completing his one year military service, the young chemist returned to the University of Marburg, where for two years he worked as assistant to his doctoral supervisor, Geheimrat Professor Theodor Zincke. Hahn's intention had been to work in industry. With this in mind, and also to improve his knowledge of English, he took up a post at University College London in 1904, working under Sir William Ramsay, known for having discovered the inert gases. Here Hahn worked on radiochemistry, at that time a very new field. In 1905, in the course of his work with salts of radium, Hahn discovered a substance he called radiothorium (thorium 228), which at that time was believed to be a new radioactive element. (In fact, it was a still undiscovered isotope of the known element thorium. The terms "isotopy" and "isotope" were only coined in 1913, by the British chemist Frederick Soddy). In the months between late 1905 and early 1906, Hahn visited Montreal, Canada, where he investigated alpha-rays of radiothorium and radioactinium with Ernest Rutherford who was teaching at McGill University at the time.

In 1906, Hahn returned to Germany, where he collaborated with Emil Fischer at the University of Berlin. Fischer placed at his disposal a former woodworking shop ("Holzwerkstatt") in the Chemical Institute to use as his own laboratory. There, in the space of a few months, using extremely primitive apparatus, Hahn discovered mesothorium I, mesothorium II and - independently from Bertram Boltwood - the mother substance of radium, ionium. In subsequent years, mesothorium I (radium-228) assumed great importance because, like radium-226 (discovered by Pierre and Marie Curie), it was ideally suited for use in medical radiation treatment, while costing only half as much to manufacture. (In 1944, for the discovery of mesothorium I, Otto Hahn was first nominated for the Nobel Prize in Chemistry by Adolf von Baeyer). In June 1907, by means of the traditional habilitation thesis, Hahn qualified to teach at the University of Berlin. On 28 September 1907 he made the acquaintance of the young Austrian physicist Lise Meitner, who had transferred from Vienna to Berlin. So began the thirty-year collaboration and lifelong close friendship between the two scientists. After the physicist Harriet Brooks had observed a radioactive recoil in 1904, but interpreted it wrongly, Otto Hahn succeeded, in the winter of 1908/09, in demonstrating the radioactive recoil incident to alpha particle emission and interpreting it correctly.

In 1910 Hahn was appointed professor, and in 1912 he became head of the Radioactivity Department of the newly founded Kaiser Wilhelm Institute for Chemistry in Berlin-Dahlem (since 1956 "Otto Hahn Building of the Free University", Berlin, Thielallee 63). Succeeding Alfred Stock, Hahn was director of the institute from 1928 to 1946. As early as 1924, Hahn was elected to full membership of the Prussian Academy of Sciences in Berlin (proposed by Einstein, Planck, Fritz Haber, Schlenk and von Laue).

In June 1911, while attending a conference in Stettin (today Szczecin, Poland) Otto Hahn met Edith Junghans (1887–1968), an art student. On 22 March 1913 the couple married in Edith's native city of Stettin, where her father, Paul Ferdinand Junghans, was a high-ranking law officer and President of the City Parliament until his 1915 death. Their only child, Hanno, born in 1922, became a distinguished art historian and architectural researcher (at the Hertziana in Rome). In 1960, while on a study trip in France, Dr Hanno Hahn was involved in a fatal car accident, together with his wife and assistant Ilse Hahn, née Pletz. They left a fourteen-year-old son, Dietrich. In 1990, the "Hanno and Ilse Hahn Prize for Outstanding Contributions to Italian Art History" was established to support talented young art historians and in memory of Hanno and Ilse Hahn. It is awarded biennally by the Bibliotheca Hertziana, Max Planck Institute for Art History, in Rome.

During the First World War, Hahn was conscripted into the army, where he was assigned, together with James Franck and Gustav Hertz, to the special unit for chemical warfare under the direction of Fritz Haber. The unit developed, tested and produced poison gas for military purposes, and was sent to both the western and eastern front lines. In December 1916, Hahn was transferred to the "Headquarters of His Majesty" in Berlin, and was able to resume his radiochemical research in his institute. In 1917/18 Hahn and Lise Meitner isolated a long-lived activity, which they named "proto-actinium". Already in 1913, Fajans and Göhring had isolated a short-lived activity from uranium X2 and called the substance "brevium". The two activities were different isotopes of the same undiscovered element no. 91. Finally in 1949, the International Union of Pure and Applied Chemistry (IUPAC) named this new element protactinium and confirmed Hahn and Meitner as discoverers.

In February 1921, Otto Hahn published the first report on his discovery of uranium Z, the first example of nuclear isomerism. And, indeed, it was not until 1936 that the young physicist Carl Friedrich von Weizsäcker succeeded in providing a theoretical explanation of the phenomenon of nuclear isomerism. For this discovery, whose full significance was recognized by very few, Hahn was again proposed, in 1923, for the Nobel Prize in Chemistry, this time by Max Planck, among others. In the early 1920s, Otto Hahn created a new field of work. Using the "emanation method", which he had recently developed, and the "emanation ability", he founded what became known as "Applied Radiochemistry" for the researching of general chemical and physical-chemical questions. In 1933 he published a book in English (and later in Russian) entitled "Applied Radiochemistry". It contains the lectures given by Hahn when he was a visiting professor at Cornell University in Ithaca, New York in 1933.

Jointly with Lise Meitner and his pupil and assistant Fritz Strassmann (1902–1980), Otto Hahn furthered the research begun by Enrico Fermi and his team in 1934 when they bombarded uranium with neutrons. Until 1938, it was believed that the elements with atomic numbers greater than 92 (known as transuranium elements) arise when uranium atoms are bombarded with neutrons. The German chemist Ida Noddack proposed an exception. But no physicist or chemist really took Noddack's speculation seriously or tested them, not even Ida Noddack. The idea that heavy atomic nuclei could break down into lighter elements was regarded as a totally inadmissible theory and impossible to test experimentally. On 13 July 1938, with the help and support of Hahn, Lise Meitner, who was at great risk as she was of Jewish ancestry and had lost her Austrian citizenship after the Anschluss, emigrated to Stockholm, Sweden by crossing the German-Dutch border illegally. Hahn continued to work with Strassmann on elucidating the outcome of bombardment of uranium with thermal neutrons. In December 1938, when Hahn and Strassmann looked for transuranium elements in a uranium sample that had been bombarded with neutrons, they found traces of barium. The barium was detected by the use of an organic barium salt constructed by Wilhelm Traube, a Jewish chemist who was later arrested and murdered despite Hahn's efforts to save him. On the evidence of the decisive experiment on 17 December 1938 (the celebrated "radium-barium-mesothorium-fractionation"), Otto Hahn concluded that the uranium nucleus had "burst" into atomic nuclei of medium weight. This was the discovery of nuclear fission. On 22 December 1938, Hahn and Fritz Strassmann sent a manuscript to Naturwissenschaften reporting their radiochemical results, which were the irrefutable proof that the uranium had been split into fragments consisting of lighter elements; simultaneously, they communicated these results to Lise Meitner, who had escaped out of Germany earlier that year and was then in Sweden. Meitner, and her nephew, the young physicist Otto Robert Frisch, correctly interpreted these results as being nuclear fission, a term coined by Frisch, which subsequently became internationally known. Frisch confirmed this experimentally on 13 January 1939. In their second publication on nuclear fission (Die Naturwissenschaften, 10 February 1939) Otto Hahn and Fritz Strassmann predicted the existence and liberation of additional neutrons during the fission process, which was proofed as chain reaction by Frédéric Joliot and his team in March 1939.

During the war, Otto Hahn - together with his assistants Hans-Joachim Born, Siegfried Flügge, Hans Götte, Walter Seelmann-Eggebert and Fritz Strassmann - worked on uranium fission reactions. By 1945 he had drawn up a list of 25 elements and about 100 isotopes whose existence he had demonstrated. Thanks to his determined intervention, Hahn, who had always been an opponent of the Nazi dictatorship, was able to support numerous members of his institute whose lives were in danger or were suffering persecution, and prevent them from being sent to the front line or deported. In this, he was assisted by his courageous wife Edith, who had for years collected food for Jews hiding in Berlin. As early as 1934, Hahn resigned from the University of Berlin to protest the dismissal of Jewish colleagues, notably Lise Meitner, Fritz Haber, and James Franck. At the end of World War II in 1945 Hahn was suspected of working on the German nuclear energy project to develop an atomic reactor or an atomic bomb. But his only connection was the discovery of fission, he did not work on the program. Hahn and nine German physicists (including Max von Laue, Werner Heisenberg and Carl Friedrich von Weizsäcker) were interned at Farm Hall, Godmanchester, near Cambridge, England from 3 July 1945 to 3 January 1946. While they were there, the German scientists learned of the dropping of the American atom bombs on Hiroshima and Nagasaki on 6 August and 9 August 1945. Hahn was on the brink of despair, as he felt that because he had discovered nuclear fission he shared responsibility for the death and suffering of hundreds of thousands of Japanese people. Early in January 1946, the group was allowed to return to Germany.

On 15 November 1945 the Royal Swedish Academy of Sciences announced that Hahn had been awarded the 1944 Nobel Prize in Chemistry "for his discovery of the fission of heavy atomic nuclei." Some historians have documented the history of the discovery of nuclear fission and believe Meitner should have been awarded the Nobel Prize with Hahn. Hahn was still being detained at Farm Hall when the announcement was made, thus, his whereabouts were a secret and it was impossible for the Nobel committee to send him a congratulatory telegram. Instead, he learned about his award through the Daily Telegraph newspaper. His fellow interned German scientists celebrated his award on 18 November by giving speeches, making jokes, and composing songs. On 4 December, Hahn was persuaded by two of his captors to write a letter to the Nobel committee accepting the prize but also stating that he would not be able to attend the award ceremony. He could not participate in the Nobel festivities on 10 December since his captors would not allow him to leave Farm Hall. Hahn attended the Nobel festivities the year after he was awarded the prize. On 10 December 1946, King Gustav V of Sweden finally presented him with his Nobel Prize medal and diploma.

From 1948 to 1960 Otto Hahn was the founding President of the newly formed Max Planck Society for the Advancement of Science, which through his tireless activity and his worldwide respected personality succeeded in regaining the renown once enjoyed by the Kaiser Wilhelm Society. Immediately after the Second World War, Hahn reacted to the dropping of the atomic bombs on Hiroshima and Nagasaki by coming out strongly against the use of nuclear energy for military purposes. He saw the application of his scientific discoveries to such ends as a misuse, or even a crime. Consequently, among other things, he initiated the Mainau Declaration of 1955, in which a large number of Nobel Prize-winners called attention to the dangers of atomic weapons and warned the nations of the world urgently against the use of "force as a final resort". He was also instrumental and one of the authors of the Göttingen Manifesto of 1957, in which, together with 17 leading German atomic scientists, he protested against a proposed nuclear arming of the new West German armed forces (Bundeswehr). In January 1958, Otto Hahn signed the Pauling Appeal to the United Nations for the "immediate conclusion of an international agreement to stop the testing of nuclear weapons", and in October he signed the international Agreement to call a meeting to draw up a world constitution. Right up to his death, he never tired of warning urgently of the dangers of the nuclear arms race between the great powers and of the radioactive contamination of the planet. From 1957, Hahn was repeatedly nominated for the Nobel Peace Prize by a number of organizations, including the largest French trade union, the Confederation Generale du Travail.

Hahn received many governmental honours and academic awards from all over the world. He was elected member or honorary member in 45 Academies and scientific societies and received 37 of the highest national and international orders and medals. In 1959 President Charles de Gaulle of France made him an Officer of the Légion d'Honneur, he was made a knight of the Peace Class of the Order Pour le Mérite, received the Distinguished Service Order and the Grand Cross of the Federal Republic of Germany. In 1961 Pope John XXIII awarded him the Gold Medal of the Papal Academy. (In 1957 Hahn was elected an honorary citizen of the city of Magdeburg, German Democratic Republic, and in 1958 an honorary member of the Soviet Academy of Science in Moscow. He declined both honours). In 1966, President Lyndon B. Johnson of the USA, and the USA Atomic Energy Commission awarded Hahn (together with Lise Meitner and Fritz Strassmann) the Enrico Fermi Prize. This was the only time the Fermi Prize has been awarded to non-Americans.
Hahn was made an honorary citizen of the cities of Frankfurt am Main and Göttingen, and of the land and the city of Berlin.