Tunku Abdul Rahman was born in Istana Pelamin, Alor Star, Kedah, the seventh son and twentieth child of Sultan Abdul Hamid Halim Shah, the twenty-fourth Sultan of Kedah. His mother, Paduka Seri Cik Menjalara, was the Sultan's sixth wife and the daughter of a Siamese nobleman, Luang Naraborirak (Kleb), a Thai district officer (Nonthaburi Province) during the reign of King Rama V of Thailand.

In 1902, the Keeper of the Ruler’s Seal was exposed as a man who had misused the trust placed in him and had sold state land for his own gain. Punishment lay with the Sultan, who ordered death for the Keeper, and decreed that the right thumb of the Keeper’s wife as well as those of his children should be chopped off as a taint they would carry on for the rest of their lives. The Keeper’s wife rushed to Menjalara, then known to be the Sultan’s favourite and implored her intervention. Menjalara, following her maternal instincts, agreed to intercede. She had an audience with the Sultan and told him that she was pregnant again, but feared her child might be seriously affected if the punishment on the Keeper and his family were to be carried out. Menjalara was a subtly clever woman, as there is a Malay superstition that a husband should do nothing evil during the period of his wife’s pregnancy, otherwise a dark spirit would enter the child in the womb. Sultan Abdul Hamid was so elated at the news that his favourite wife was presenting him with another child, and so anxious that nothing unfortunate should happen that he ordered the Keeper to prison instead and cancelled the punishment on his family. The truth, however, was that Menjalara was not pregnant at that time. But she conceived soon afterwards, and the child born was Tunku Abdul Rahman who, when he was alive, delighted in saying that he was “born under a true”.

Abdul Rahman began his education in 1909 at a Malay Primary School, Jalan Baharu, in Alor Star and was later transferred to the Government English School, now the Sultan Abdul Hamid College, Alor Star, where he studied during the day and read the Qur'an in the afternoon. Two years later in 1911, when he was eight, he was sent to study at Debsirin School in Bangkok along with his three brothers. In 1915, he returned and continued his studies at Penang Free School. In 1918, Abdul Rahman was awarded a Kedah State Scholarship to further his studies at St Catharine's College in the University of Cambridge, where he obtained his Bachelor of Arts degree in 1925. He was the first student from Kedah to study in the United Kingdom under the sponsorship of the Kedah State Government.

Upon his return home, Abdul Rahman worked in the Kedah public service and was appointed as District Officer of Kulim and Sungai Petani. In colonial Malaya, almost all the District Officers were British. Abdul Rahman who was the only Malay District Officer at that time had the people's interest at heart. This made him cross swords with the British Administration many times. However, the British Administration in Kedah could not do anything as he was a prince and the son of the Sultan. However, him angering the colonial administration cost him many chances of promotion to higher offices.

Some time later, he returned to England to complete his law studies at the Inner Temple but was forced to stop in 1938. At the outbreak of World War II, he returned to Malaya. During the Japanese Occupation of Kedah, the Tunku was responsible for saving many lives, both Malay and Chinese. Him being of royal blood was highly revered by the Japanese and could not be touched by them, and he used this to his advantage. Many people from Kulim today lay claim to owing their lives to the Tunku.

He resumed his studies at the Inner Temple in 1947. And in 1949, he qualified for the Bar. During this period, Abdul Rahman met Abdul Razak Hussein (later known as Datuk and Tun). He was elected president of the Malay Society of Great Britain, and Abdul Razak, who was twenty-six, was his secretary.

After his return to Malaya in 1949, Abdul Rahman was first posted at the Legal Officer's office in Alor Star. He later asked to be transferred to Kuala Lumpur, where he became a Deputy Public Prosecutor. He was later appointed as president of the Sessions Court.

During this period, nationalism was running high among the Malays, with Datuk Onn Jaafar leading the United Malays National Organisation (UMNO) in the struggle against Britain's Malayan Union. Abdul Rahman joined UMNO and became active in Malayan nationalist politics. He was popular and later became head of the Kedah branch of UMNO. In August 1951 an internal crisis in UMNO forced Datuk Onn Jaafar to resign as party president. Abdul Rahman was elected as the new president, eventually holding the post for 20 years.

In 1954 Abdul Rahman led a delegation to London to seek independence for Malaya, but the trip proved to be unfruitful. The British were reluctant to grant independence, using the excuse that there needed to be evidence that the different races in Malaya were able to work together and cooperate before independence could be obtained. Race relations was the cause of Onn Jaafar stepping down. He wanted UMNO to be open to the Chinese and Indians but UMNO members were not ready to accept this. His successor, Abdul Rahman saw a way around this by forming a political alliance with the Malayan Chinese Association called the Alliance Party. The coalition proved to be popular among the people. The Alliance was later joined by the Malayan Indian Congress (MIC) in 1955, representing the Indian community.

In the same year, the first federal general election was held, and the Alliance Party (Perikatan) won fifty-one out of the fifty-two seats contested. Abdul Rahman was selected as Malaya's first Chief Minister. 

Later in 1955 Abdul Rahman made another trip to London to negotiate Malayan independence, and 31 August 1957 was decided as the date for independence. When the British flag was lowered in Kuala Lumpur on independence day, Abdul Rahman led the crowd in announcing "Merdeka!" (independence). Photographs of Abdul Rahman raising his hand, and recordings of his emotional but determined voice leading the cheers, have become familiar icons of Malaysian independence.

Abdul Rahman dominated the politics of independent Malaya (which became Malaysia in 1963), and led the Alliance to landslide wins in the 1959, and 1964 general elections. The formation of Malaysia was one of Abdul Rahman's greatest achievements. In 1961 he made a speech at the Foreign Correspondents Association of Southeast Asia in Singapore, proposing a federation Malaya, Singapore, Sabah, Sarawak, and Brunei. On 16 September 1963, with the federation of all these states except Brunei, Abdul Rahman was formally restyled Prime Minister of Malaysia.

However, the racial factor worsened with the inclusion of Singapore, which increased the Chinese proportion to more than 40%. Both UMNO and the MCA were nervous about the possible appeal of Lee Kuan Yew's People's Action Party (PAP, then seen as a radical socialist party) to voters in Malaya, and tried to organise a party in Singapore to challenge Lee's position there. Lee in turn threatened to run PAP candidates in Malaya at the 1964 federal elections, despite an earlier agreement that he would not do so. This provoked Abdul Rahman to demand that Singapore withdraw from Malaysia. On 7 August 1965, Abdul Rahman announced to the Parliament of Malaysia in Kuala Lumpur that it should vote yes on the resolution to have Singapore leave the Federation, choosing to "sever all ties with a State Government that showed no measure of loyalty to its Central Government" as opposed to the undesirable method of repressing the PAP for its actions. Singapore's secession and independence became official on 9 August 1965.

At the 1969 general election, the Alliance's majority was greatly reduced. Demonstrations following the elections sparked the May 13 racial riots in Kuala Lumpur. Some UMNO leaders led by Tun Abdul Razak were critical of Abdul Rahman's leadership during these events, and an emergency committee MAGERAN took power and declared a state of emergency. Abdul Rahman's powers as Prime Minister were severely curtailed, and on 22 September 1970, he was forced to resign as Prime Minister in favour of Abdul Razak. He subsequently resigned as UMNO President in June 1971, in the midst of severe opposition of the 'Young Turks' comprising party rebels such as Mahathir Mohammad and Musa Hitam. The duo later became Prime Minister and Deputy Prime Minister of Malaysia respectively.

After making Islam the official religion in 1960, Abdul Rahman established the Islamic Welfare Organisation (PERKIM), an organisation to help Muslim converts adjust to new lives as Muslims. He was President of PERKIM until a year before his death. In 1961 Malaysia hosted the first International Qur'an Recital Competition, an event that developed from Abdul Rahman's idea when he organised the first state-level competition in Kedah in 1951.

In 1969 Abdul Rahman helped to set up the Organisation of Islamic Conference (OIC), of which he was the first Secretary-General. Subsequently, he initiated the setting up of the Islamic Development Bank as a specialised institution within the OIC. He was also President of the Regional Islamic Da'wah Council of South East Asia and the Pacific (RISEAP) from 1982 to 1988.

Abdul Rahman upheld the independence social contract of a secular Malaysia with Islam as its official religion. On the occasion of his 80th birthday, Abdul Rahman stated in the The Star newspaper of 9 February 1983 that the "country has a multi-racial population with various beliefs. Malaysia must continue as a secular State with Islam as the official religion." In the same issue of The Star, Abdul Rahman was supported by the third Malaysian Prime Minister, Hussein Onn, who stated that the "nation can still be functional as a secular state with Islam as the official religion."

An avid sportsman, Tunku Abdul Rahman was a firm believer that sports was a good catalyst to bring about greater social unity among Malaysians of various races and religions. Therefore he supported or started many sports events. Tunku initiated an international football tournament, the Pestabola Merdeka (Independence Football Festival) in 1957. The following year, he was elected as the first president of Asian Football Confederation (AFC), a post he held until 1976. Tunku also loved horse racing and was a regular at the Selangor Turf Club. He claims his lucky number is 13. He would win horse races that were held on the 13th of the month. Winning was a sure thing on Friday the 13th for him, he claimed.

In 1977, having acquired substantial shares in The Star, a Penang-based newspaper, Abdul Rahman became the newspaper's Chairman. His columns, "Looking Back" and "As I See It", were critical of the government, and in 1987 Prime Minister Mahathir Mohamad banned the newspaper. This led to a split in UMNO, with Abdul Rahman and another former Prime Minister, Tun Hussein Onn, setting up a new party called UMNO Malaysia, but its registration was quashed by Mahathir Mohamad, who set up his own UMNO Baru ("New UMNO"). Abdul Rahman later supported Semangat 46, a splinter group of UMNO led by Tengku Razaleigh Hamzah. He campaigned actively for the latter in the General election of 1990, but was already in very poor health. The well-educated, visionary Tunku clashes with Mahathir's brand nationalism that was meant to help the economically and socially stunted Malays of Malaysia (due to the effect of colonial British 'divide and rule' system).

Tunku Abdul Rahman died on 6 December 1990 at the age of eighty-seven, and was laid to rest at the Langgar Royal Mausoleum in Alor Star.

Abdul Rahman married at least four times. By his first wife, a Thai Chinese woman named Meriam Chong, he had Tunku Khadijah and Tunku Ahmad Nerang. On Meriam's death, he married his former landlady in England, Violet Coulson. He was ordered to divorce her by the Regent of Kedah. He then married Sharifah Rodziah Syed Alwi Barakbah, with whom he adopted four children, Sulaiman, Mariam, Sharifah Hanizah (granddaughter) and Faridah. Wanting to have more children of his own, he secretly married another Chinese lady named Bibi Chong who converted upon marriage. He had two daughters with her, Tunku Noor Hayati and Tunku Mastura.