His father was an impoverished bey from Frashër, Kolonje, now District of Përmet. Naim studied at the Zosimea, Greek high school, in Ioannina, back then the city was part of the Ottoman Empire.

Hailing from a family with long connections to the Bektashi Sufi order, Naim became an Ottoman official in Sarandë, Berat, and Ioannina. In 1882, Frashëri became the head of the censorship department in Istanbul.

Naim took part in the National Renaissance of Albania, and often had to sign his writings using his initials, as otherwise he would have placed himself in danger in front of Ottoman officials. His works had to be smuggled into Albania.

Early on, he started writing poetry. The very first pieces Frashëri wrote were in Persian. In all, he authored twenty-two major works: four in Turkish, one in Persian, two in Greek and fifteen in Albanian. The patriotic poems and highly popular lyric poetry, were at first strongly influenced by Persian literature, and later also French poetry. He also translated several fables of Jean de la Fontaine. Naim Frashëri's poem Herds and Tillage depicts the activities of the shepherd and the tiller, alongside his personal reflections on the beauty of Albanian landscapes and expressions of longing after his homeland. The epic poem Skanderbeg's Story retells the life of national hero Gjergj Kastriot Skanderbeg, while intertwining it with imaginary episodes. He also translated Homer's Iliad, and wrote articles on didactics and Islamic practice.

Frashëri died in Kızıltoprak, Kadıköy, an Istanbul neighborhood, in present-day Turkey.

Through all of his writings, Frashëri exerted a strong influenced on the later Albanian literature and society. The independent Albanian state created an order of merit that bears his name, awarded to, amongst others, Mother Teresa; a publishing house in Tirana was named Naim Frashëri. Naim Frashëri is depicted on the obverses of the Albanian 500 lekë banknote of 1992 - 1996, and of the 200 lekë banknote issued since 1996.