Gustav Walter Heinemann was named after his mother's father, a master roof tiler in the city of Barmen, with radical democratic, left liberal, and patriotic views. His maternal grandfather, Heinemann's great-grandfather, had taken part in the Revolution of 1848. Gustav Heinemann's father, Otto Heinemann, a manager at the Krupp steelworks in Essen, shared his father-in-law's views. In his youth, Gustav Heinemann already felt called upon to preserve and promote the liberal and democratic traditions of 1848. Throughout his life he fought against all kinds of subservience. This attitude helped him to maintain his intellectual independence even in the face of majorities in political parties and in the Church.

Having finished grammar school in 1917, Heinemann briefly became a soldier in the First World War, but on account of severe illness he was not sent to the front. From 1918, he studied law, economics, and history at the universities of Münster, Marburg, Munich, Göttingen, and Berlin, graduating in 1922, and passed the bar in 1926. He received a Ph.D in 1922 and a doctorate of law in 1929. The friendships Heinemann formed during his student years often lasted for a lifetime. Among his friends were such different people as Wilhelm Röpke, who was to become one of the leading figures of economic liberalism, Ernst Lemmer, later a trade unionist and also a Christian Democrat, and Viktor Agartz, a Marxist.

At the beginning of his career, Heinemann joined a renowned firm of solicitors in Essen. In 1929 he published a book about legal questions in the medical profession. From 1929 to 1949 he worked as a legal adviser to the Rheinische Stahlwerke in Essen, from 1936 to 1949 also as one of its directors. The steelworks were considered to be essential for the war, so Heinemann was not drafted into the army. He was a lecturer at the law school of Cologne university between 1933 and 1939. It was probably his refusal to become a member of the NSDAP which finished his academic career. He was also invited to join the board of directors of the Rheinisch-Westfaelisches Kohlesyndikat in 1936, but turned the offer down as he was expected to end his work for the Confessing Church.

In 1926 Heinemann married Hilda Ordemann, who had been a student of Rudolf Bultmann's, the famous Protestant theologian. His wife and the minister of his wife's parish, Wilhelm Graeber, led Heinemann back to Christianity, from which he had become estranged. Through his sister-in-law he became acquainted with Swiss theologian Karl Barth, who strongly influenced him, e.g. in his condemnation of nationalism and antisemitism. Gustav and Hilda Heinemann had three daughters: Uta (later Uta Ranke-Heinemann), Christa (mother of Christina, federal president Johannes Rau's wife), and Barbara, and a son: Peter.

Heinemann was an elder (Presbyter) in Wilhelm Graeber's parish in Essen when Graeber was sacked in 1933 by the new church authorities who co-operated with the Nazis. Opposition against those German Christians came from the Confessing Church, and Heinemann became a member of its synod and its legal adviser. As he disagreed with some of the developments within the Confessing Church, he withdrew from the church leadership in 1939, but continued as an elder in his parish, in which capacity he gave legal advice to persecuted fellow Christians and helped Jews who had gone into hiding by providing them with food. Information sheets of the Confessing Church were printed in the cellar of Heinemann's house and distributed all over Germany.

From 1936 to 1950, Heinemann was head of the YMCA in Essen.

In August 1945 he was elected as a member of the Council of the Evangelical Church in Germany. The Council issued the Stuttgart Declaration of Guilt in October 1945, in which it confessed guilt for the inadequacies of the Protestant church in its opposition to the Nazis and the Third Reich. Heinemann regarded this declaration as a "linchpin" in his work for the church. From 1949 to 1955 Heinemann was president of the all-German Synod of the Protestant Churches of Germany. He was among the founders of the German Protestant Church Congress (Deutscher Evangelischer Kirchentag), a congress of the Protestant laity. In 1949 he was also one of the founding editors of Die Stimme der Gemeinde ("The Voice of the Congregation"), a magazine which was published by the Bruderrat (Brethrens' Council) of the Confessing Church. In the World Council of Churches he belonged to its "Commission for International Affairs".

As a student, Heinemann, like his friends Lemmer and Roepke, belonged to the Reichsbund deutscher demokratischer Studenten, the student organization of the liberal German Democratic Party which strongly supported the democracy of the Weimar Republic.

He heard Hitler speak in Munich in 1920 and had to leave the room after interrupting Hitler's diatribe against the Jews.

In 1930 Heinemann joined the Christlich-Sozialer Volksdienst ("Christian Social People's Service"), but he voted for the Social Democratic Party in 1933 in order to pevent a victory of the NSDAP.

After the Second World War, the British authorities appointed Gustav Heinemann Mayor of Essen, and in 1946 he was elected to that office, which he kept until 1949. He was one of the founders of the CDU in North Rhine-Westphalia, in which he saw an interdenominational and democratic association of people opposed to Nazism. He was a member of the North Rhine-Westphalian parliament (Landtag, 1947 – 1950), and from 1947 to 1948 Minister of Justice in the North Rhine-Westphalian government of CDU Prime Minister Karl Arnold.

When Konrad Adenauer became the first Chancellor of the newly founded Federal Republic of Germany in 1949, he wanted a representative of the Protestants in the CDU in his government. Gustav Heinemann, the president of the Synod of Protestant Churches, reluctantly agreed to become Adenauer's Minister of the Interior although he had planned to resume his career in industry. A year later, when it became known that Adenauer had secretly offered German participation in a Western European army, Heinemann resigned from the government. He was convinced that any form of armament in the Federal Republic would diminish the chances of German re-unification, and increase the risk of war.

Heinemann left the CDU, and in 1952 founded his own political party, the All-German People's Party (Gesamtdeutsche Volkspartei- GVP). Among its members were such politicians as later Federal President Johannes Rau, and Erhard Eppler. They advocated negotiations with the Soviet Union with the aim of a re-united, neutral Germany between the blocs. But the GVP failed to attract substantial numbers of voters. Consequently Heinemann dissolved his party in 1957 and joined the Social Democratic Party of Germany (SPD), whose aims were relatively close to his own. There he soon became a member of the party's National Executive. He helped the SPD to change into a Volkspartei (party of the people) by opening it up for socially minded Protestants and middle class people especially in the industrial districts of Germany.

In October 1950 Heinemann had started practising as a lawyer again. In court, he predominantly represented political and religious minorities. He also worked for the release of prisoners in East Germany. Later he counselled conscientious objectors to compulsory military service and defended Jehova's Witnesses in court who even refused to do community work instead of military service (absolute conscientious objection).

As an SPD MP in the Bundestag, the parliament of West Germany, Heinemann passionately fought against Adenauer's plans of acquiring atomic weapons for the West German army (Bundeswehr).

In the "Grand Coalition" government of Chancellor Kurt Georg Kiesinger (CDU) and Foreign Minister Willy Brandt (SPD) Heinemann was Minister of Justice (1966 – 69). He initiated a number of liberal reforms, especially in the field of criminal law.

In March 1969 Gustav Heinemann was elected President of the Federal Republic of Germany. As he was elected with the help of most delegates of the Free Democratic Party (FDP/Liberals) his election was generally understood as a sign of the re-orientation of the FDP with regard to a future coalition with the SPD (Social-liberal coalition, October 1969 - October 1982).

In an interview Heinemann once said that he wanted to be "the citizens' president" rather than "the president of the state". He established the tradition of inviting ordinary citizens to the president's New Year's receptions, and in his speeches he encouraged the Germans to overcome the spirit of submissiveness to the authorities, to make full use of their democratic rights, and to defend the rule of law and social justice. This attitude and his open-mindedness towards the student protests of 1968 made him popular among the younger generation, too. When asked whether he loved the German state, he answered that he didn't love the state, he loved his wife.

Heinemann mainly visited countries that had been occupied by German troops in World War II. He supported the social-liberal government's policy of reconciliation with the Eastern European states. He promoted research into the nature of conflicts and of peace, as well as about problems of the environment.

It was Heinemann's idea to found a museum for the commemoration of German liberation movements, and he was able to officially open such a place in Rastatt in 1974. His interest in that subject was partly due to the involvement of his own ancestors in the revolution of 1848.

On account of his age and fragile health Heinemann did not stand for a possible second term as President in 1974. He died in 1976.

A short time before his death he published an essay in which he criticized the Radikalenerlass ("Radicals Decree") of 1972, a rule which subjected all candidates for the civil service (including prospective teachers, railway engine drivers, and postmen) to special scrutiny in order to exclude political radicals. He thought it was not compatible with the spirit of the constitution that a large group of people were generally treated as suspects.

The Gustav-Heinemann-Friedenspreis (Gustav Heinemann Peace Prize) is an annual prize for children's and young people's books that are deemed to have best promoted the cause of world peace.