Milan Obrenović IV was born in exile in Manasija (Mărăşeşti, Moldavia) during a period of the Karađorđević rule in Serbia which began in 1842 with the deposition of Milan's cousin Prince Mihailo Obrenović. He was the son of Miloš (1829 - 1861) and Maria Katargi from Moldavia. Milan's father, Miloš, was the son of Jevrem (1790 - 1881), the brother of famous Serb Prince, Miloš Obrenović. Milan was therefore Prince Miloš's grandnephew. At an early age Milan lost his father. He was subsequently adopted by his cousin, Prince Mihailo.

After the expulsion of the House of Karađorđević in 1858, Mihailo Obrenović returned to Serbia. He became ruling prince of Serbia in 1860, when his father, Miloš, died. During the reign of Mihailo, young Milan was educated at the Lycée Louis le Grand in Paris. There he displayed considerable maturity.

In 1868, when Milan was only fourteen years of age, Prince Mihailo was assassinated. Milan succeeded Mihailo to the throne under a regency. In 1872, Milan was declared of age, and he took government into his own hands. He soon manifested great intellectual power, coupled with a passionate headstrong character. Eugene Schuyler, who saw him about this time, found him a very remarkable, singularly intelligent, and well-informed young man. Milan carefully balanced the Austrian and Russian parties in Serbia, with a judicious leaning towards Austria-Hungary. At the end of the Russo-Turkish War, 1877 – 1878, Prince Milan induced the Porte to acknowledge his independence at the Treaty of Berlin.

In 1882, Milan was proclaimed King of Serbia. Acting under Austrian influence, King Milan devoted all his energies to the improvement of the means of communication and the development of natural resources. However, the cost of this, unduly increased by reckless extravagance, led to disproportionately heavy taxation. This, coupled with increased military service, rendered King Milan and the Austrian party unpopular. Milan's political troubles were further increased by the defeat of the Serbians in the war against Bulgaria from 1885 – 1886. In September 1885, the union of Eastern Rumelia and Bulgaria caused widespread agitation in Serbia. Milan promptly declared war upon the new Bulgarian state on November 15. After a short, decisive campaign, the Serbs were utterly routed at the battles of Slivnitsa and Pirot. Milan's throne was only saved by the direct intervention of Austria-Hungary. Domestic difficulties now arose which rapidly assumed political significance.

In October 1875, Milan had married Natalija Obrenović, the sixteen-year old daughter of Peter Ivanović Ketchko. Ketchko (Keshko), a Moldavian boyar, was also a colonel in the Russian army. Ketchko's wife, Pulcheria, was by birth a Sturdza (of the princely Sturdza family). A son, Alexander, was born to Natalija and Milan in 1876, but the king and queen's relationship showed signs of friction. Milan was anything but a faithful husband, having an affair with most notably Jennie Jerome (wife of Lord Randolph Churchill and mother to Winston Churchill) among others, while Queen Natalija was greatly influenced by Russian sympathies. In 1886, the couple, mismatched both personally and politically, separated. Natalija withdrew from the kingdom, taking with her the ten-year old Prince Alexander (later King Alexander I). While she was residing at Wiesbaden in 1888, King Milan succeeded in recovering the crown prince, whom he undertook to educate. In reply to the queen's remonstrances, Milan exerted considerable pressure upon the metropolitan, and procured a divorce, which was afterwards annulled as illegal. King Milan now seemed master of the situation.

On January 3, 1889, Milan adopted a new constitution much more liberal than the existing one of 1869. Two months later, on March 6, Milan suddenly abdicated the throne in favor of his son. No satisfactory reason was assigned for this step. Milan settled in Paris as a private individual.

In February 1891, a Radical ministry was formed. Queen Natalija and the ex-metropolitan Mihailo returned to Belgrade, and Austrian influence began to give way to Russian. Fear of a revolution and of King Milan's return led to a compromise, by which, in May 1891, the queen was expelled, and Milan was allowed a million francs from the civil list, on condition of not returning to Serbia during his son's minority. In March 1892, Milan renounced all his rights and even his Serbian nationality. The situation altered dramatically, however, after the young King Alexander had effected his coup d'etat and taken government into his own hands in April 1893. Serbian politics began to grow more complicated, and Russian influence was rife. In January 1894, Milan suddenly appeared in Belgrade, and his son gladly welcomed his experience and advice. On April 29, a royal decree reinstated Milan and Natalija, who in the meantime had become ostensibly reconciled, in their position as members of the royal family. On May 21, the constitution of 1869 was restored, and Milan continued to exercise considerable influence over his son. The queen, who had been residing chiefly at Biarritz, returned to Belgrade in May 1895, after four years of absence, and was greeted by the populace with great enthusiasm.

In 1897, Milan was appointed commander-in-chief of the Serbian army. In this capacity he did some of the best work of his life, and his success in improving the Serbian military system was very marked. His relations with the young king also remained good, and for a time it seemed as though all Russian inroads were being checked. The good relations between father and son were interrupted, however, by the latter's marriage to Draga Mašin in July 1900. Milan violently opposed the match, and resigned his post as commander-in-chief. Alexander subsequently banished Milan from Serbia and threw himself into the arms of Russia. Milan retired to Vienna and on February 11, 1901, Milan unexpectedly died.

Milan was an able, though headstrong man. In considering Milan's relations with his young son, it must be remembered that in the dynastic and political conditions of contemporary Serbia, the natural feeling in Milan was inevitably subordinate to other considerations.