Mohamed Boudiaf was born in M'Sila, Algeria, to a family of former nobility, which had lost its standing and influence during colonial times. His education was cut short after primary school by poor health (tuberculosis) and his increasing activism in the nascent nationalist movement. A member of the nationalist Parti du Peuple Algérien (PPA) of Messali Hadj, he later joined the successor organization MTLD and its secret paramilitary wing, the Organisation Spéciale (OS). Boudiaf was responsible for organizing the OS network in the Sétif region, storing arms, collecting funds and preparing guerrilla forces. He was sentenced in absentia to 10 years of prison by the French authorities, but avoided arrest.

When Messali decided to dissolve the OS, his rivals combined with stalwarts of the guerrilla strategy to form the CRUA, a breakout committee designed to lay the groundwork for revolutionary war. Boudiaf was among them, after falling out with Messali, whom he accused of authoritarian tendencies. The CRUA - PPA/MTLD rivalry quickly spiralled towards violence, and would continue during the anti-French revolution until the PPA/MTLD (then reorganized as the Mouvement nationale algérien, MNA) was destroyed. In July 1954, the CRUA-aligned Boudiaf survived an assassination attempt by his former comrades-in-arms, wounded and left for dead on an Algiers sidewalk.

The CRUA re-emerged as the Front de libération nationale, or FLN, which began a nation-wide armed insurrection against France on November 1, 1954. Boudiaf was by this time a main leader of the movement, and emerged as an important member of the exiled leadership working from Cairo and Algeria's neighbouring countries. In 1956, he was captured along with Ahmed Ben Bella and several other FLN leaders in a controversial aircraft hijacking by French forces, and imprisoned in France. While prisoner, he was symbolically elected minister in the FLN's government-in-exile, the GPRA, at its creation in 1958, and re-elected in 1960 and 1961. He was not released until immediately before the independence of Algeria in 1962, after a brutal eight-year war that had cost more than 1.5 million lives.

On independence, internal conflict racked the FLN, which split into rival factions as French forces withdrew. A military-political alliance between col. Houari Boumédiène of the Armée de Libération Nationale (ALN) and Ahmed Ben Bella, of the exiled leadership, brought down their rivals and set up a single-party state under Ben Bella's presidency.

The increasingly marginalized Boudiaf protested these developments, and founded a clandestine opposition party, the PRS, which briefly revolted against the FLN's single-party government. Boudiaf was forced into exile, and settled in neighbouring Morocco. After col. Boumédiène's coup d'état in 1965, Boudiaf remained in opposition, as he did under his successor, col. Chadli Bendjedid (in power 1979 - 92). His PRS group remained intermittently active in its opposition towards the government, but for all intents and purposes, Boudiaf had ceased to be a force of any stature in Algerian politics early on after his exile.

In February 1992, after a 27-year exile in Kenitra, 15 miles north of Morocco's capital Rabat, the military invited him back to become chairman of the High Council of State (HCE) of Algeria, a figurehead body for the military junta, following the annulment of the election results (Algerian Civil War). He quickly accepted, and was instantly signed into the post. Publicly, he was presented as a leader exiled for too long to be tainted by the violence and corruption of Algeria's internal post-revolutionary politics, but the downside was that he was little known to most of the Algerian public. However, his calls for comprehensive reform and an end to military domination of politics instilled hope, and he quickly gained some popularity, even if many still associated him with the military clique that effectively ruled Algeria in his name.

Even as head of state, Boudiaf was completely dependent on the forces that had brought him to power, and his powers were circumscribed by the military and security establishment. In addition, the country continued to drift towards civil war, with increasing Islamist violence in the regions surrounding Algiers and brutal military countermeasures both escalating the situation. The political scene remained chaotic, the economy was fraying, and Boudiaf seemed unable to effectively carry out the reforms he had promised.

On June 29, 1992, Boudiaf's term as HCE chairman was cut short when he was assassinated by a bodyguard during a televised public speech at the opening of a cultural center in Annaba, on his first visit outside Algiers as head of state. The murder caused intense shock in Algeria, and remains a moment of iconic importance in the country's modern history. Boudiaf himself has gained considerably in political stature after his death, and is now referred to by many political commentators as a martyr for Algeria, with many arguing that he could have been the country's savior.

The assassin, Lt. Lembarek Boumaârafi, was said to have acted as a lone gunman due to his Islamist sympathies. He was sentenced to death in a closed trial in 1995, but the sentence was not carried out. The murder has, unsurprisingly, been subject to significant controversy and a major magnet for Algerian conspiracy theories, with many suggesting that Boudiaf was in fact assassinated by the military establishment responsible for the coup (and for his installment as HCE chairman). These theories have centered on the fact that Boudiaf had recently initiated a drive against the corruption of the Algerian regime, and stripped several important military officials of their posts.

Mohamed Boudiaf was survived by his wife, Fatiha Boudiaf. She remains insistent that his death has not been properly investigated.