Ciampi was born in Livorno (Province of Livorno).

After receiving a doctorate in literature in 1941 from the Scuola Normale of Pisa, one of the country's most prestigious universities, he was called to military duty in Albania as a lieutenant. On 8 September 1943, on the date of the armistice with the Allies, he refused to remain in the Fascist Italian Social Republic, and took refuge in Abruzzo, in Scanno. He subsequently managed to pass the lines and reach Bari, where he joined the Partito d'Azione (and thus the Italian resistance movement).

In 1946 he married Franca Pila. That same year, he obtained a doctorate in law from the University of Pisa and began working at the Banca d'Italia. He also joined the CGIL (Trade Union), which he left in 1980.

Oxford University awarded him an Honorary Doctor of Civil Law degree in March 2005.

In 1960, he was called to work in the central administration of the Banca d'Italia, where he became Secretary General in 1973, Vice Director General in 1976, and Director General in 1978. In October 1979, he was nominated Governor of the Banca d'Italia and President of the Ufficio Italiano Cambi, positions he filled until 1993.

From April 1993 to May 1994, he was the Italian Prime Minister overseeing a technical government. Later, as Treasury Minister from 1996 to May 1999 in the governments of Romano Prodi and Massimo D'Alema, he was credited with adopting the euro currency. He personally chose the Italian design for the 1 euro coin, whereas all others were left to a television vote among some candidates the ministry had prepared. Ciampi chose the Vitruvian man of Leonardo da Vinci, on the symbolic grounds that it represented man as a measure of all things, and in particular of the coin: in this perspective,money was at the service of man, instead of its opposite. The design also fitted very well on the bimetallic material of the coin.

Ciampi was elected with a broad majority, and was the second president ever to be elected at the first ballot (when there is a requirement of a two-thirds majority) in a joint session of the Chamber of Deputies, the Italian Senate and representatives of the Regions.

He usually refrained from intervening directly into the political debate while serving as President. However, he often addressed general issues, without mentioning their connection to the current political debate, in order to state his opinion without being too intrusive. His interventions have frequently stressed the need for all parties to respect the constitution and observe the proprieties of political debate. He was generally held in high regard by all political forces represented in the parliament. The possibility of persuading Ciampi to stand for a second term as President - the so-called Ciampi-bis - was widely discussed, despite his advancing age, but it was officially dismissed by Ciampi himself on 3 May 2006, just a few days before his mandate expired. Ciampi resigned as President before the swearing-in ceremony of his successor, Giorgio Napolitano.

As President, Ciampi was not considered to be close to the positions of the Vatican and the Catholic church, in a sort of alternance after the devout Oscar Luigi Scalfaro. He has often praised patriotism, not always a common feeling in Italy because of its abuse by the Fascist regime; Ciampi, however, seems to want to stress self confidence rather than nationalism.

On 5 May 2005, he received the Charlemagne Award of the city of Aachen. On 15 June 2005, he was awarded an honorary doctorate by the École Normale Supérieure of Paris.