Olszewski is a graduate of Kazimierz Brodziński High School in Tarnów (I Liceum Ogólnokształcące im. Kazimierza Brodzińskiego). He studied at Kraków's Jagiellonian University in the departments of mathematics and physics, and chemistry and biology. He carried out his first experiments using a personally improved compressor, compressing and condensing carbon dioxide.

Olszewski defended his doctoral dissertation at Heidelberg University, then returned to Kraków, where he was made profesor nadzwyczajny (associate professor).

In 1883, Zygmunt Wróblewski and Karol Olszewski were the first in the world to liquefy oxygen, nitrogen and carbon dioxide from the atmosphere in a stable state (not, as had been the case up to then, in a dynamic state in the transitional form as vapor).

In 1884, in his Kraków laboratory, Olszewski was the first to liquify hydrogen in a dynamic state, achieving a record low temperature of -225 °C (48 K). In 1895 he liquified argon. He did not succeed, only, in liquifying newly discovered helium.

In 1896, on hearing of Wilhelm Röntgen's work with x-rays, within a few days in early February, Olszewski replicated it, thus initiating the university's department of radiology.