Chain was born in Berlin to a Russian father who moved from his birthland to study chemistry abroad, and a German Berliner mother. In 1930, he received his degree in chemistry from Friedrich Wilhelm University. After the Nazis came to power, Chain knew that he, being Jewish, would no longer be safe in Germany. He left Germany in 1933 and moved to England.

He began working on phospholipids at Fitzwilliam College, Cambridge University, under the direction of Sir Frederick Gowland Hopkins. In 1935, he accepted a job at Oxford University as a lecturer in pathology. During this time he worked on a range of research topics, including snake venoms, tumour metabolism, lysozymes, and biochemistry techniques.

In 1939, he joined Howard Florey to investigate natural antibacterial agents produced by microorganisms. This led him and Florey to revisit the work of Alexander Fleming, who had described penicillin nine years earlier. Chain and Florey went on to discover penicillin's therapeutic action and its chemical composition. He also theorized the structure of penicillin, which was confirmed by X-ray crystallography done by Dorothy Hodgkin. For this research, Chain, Florey, and Fleming received the Nobel Prize in 1945.

Towards the end of World War II, Chain learned his mother and sister had perished in the war. After World War II, Chain moved to Rome, to work at the Istituto Superiore di Sanità (Superior Institute of Health). He returned to Britain in 1964 as head of the biochemistry department at Imperial College London.

He was a life long friend of Professor Albert Neuberger FRS, whom he met in Berlin in the 1930s.

In 1948, he married Anne Beloff, sister of Max Beloff and Nora Beloff. In his later life, his Jewish identity became increasingly important to him. He became a member of the board of governors of the Weizmann Institute of Science at Rehovot in 1954, and later a member of the executive council. He raised his children securely within the Jewish faith, arranging much extracurricular tuition for them. His views were expressed most clearly in his speech ‘Why I am a Jew’ given at the World Jewish Congress Conference of Intellectuals in 1965.

Chain was knighted in 1969. After his retirement, he moved to Castlebar in the west of Ireland. He died at the Mayo General Hospital in 1979.  A road in Castlebar has been named after him.