Johan Gadolin was born in Turku, Finland (then a part of Sweden), as the son of Jakob Gadolin. He began to study mathematics at the Royal Academy of Turku when he was fifteen. Soon he found mathematics too laborious and changed his major to chemistry. In 1779 Gadolin moved to Uppsala University where he was taught by Torbern Bergman.

In 1790, he was elected a member of the Royal Swedish Academy of Sciences.

Gadolin became famous when he discovered the first rare earth element. In 1792 Gadolin received a sample of black, heavy mineral found in a quarry in the Swedish village Ytterby near Stockholm. By careful experiments, he isolated a rare earth oxide which was later named yttria. He also isolated in the same study yttrium trihydroxide. Yttria, or yttrium oxide, was the first known rare earth metal compound — at that time, it was regarded as an element. The work was published in 1794. The mineral that Gadolin examined was named gadolinite in 1800. The oxide of the element gadolinium, gadolinia, was named after Gadolin by its discoverers.

In an earlier paper in 1788 Gadolin showed that the same element can show several oxidation states, in his case Sn(II) and Sn(IV) 'by combining itself with larger or smaller amounts of the calcinating substance'. He vividly described the disproportionation reaction:

2 Sn(II)  Sn(0) + Sn(IV).

Gadolin also studied specific heats and latent heats in 1787 – 92. This thermochemical work was very precise.

One of his latest studies was the chemical analysis of the Chinese alloy pak tong (alpacca, German silver) in 1810 and 1827.

Gadolin became the professor of chemistry at the Royal Academy of Turku in 1797. He was one of the first chemists who gave laboratory exercises to students. He even allowed the students to use his private laboratory. Gadolin wrote the first anti-phlogiston chemistry textbook in the Nordic countries.