From childhood, Hesse was headstrong and hard for his family to handle. In a letter to her husband, Hermann's mother Marie wrote: "The little fellow has a life in him, an unbelievable strength, a powerful will, and, for his four years of age, a truly astonishing mind. How can he express all that? It truly gnaws at my life, this internal fighting against his tyrannical temperament, his passionate turbulence [...] God must shape this proud spirit, then it will become something noble and magnificent – but I shudder to think what this young and passionate person might become should his upbringing be false or weak.

The Swiss city of Basel, which became an important point of reference throughout Hesse's life and played an important role during the author's education

In 1881, when Hesse was four, the family moved to Basel, Switzerland, staying for six years and then returning to Calw. After successful attendance at the Latin School in Göppingen, Hesse entered the Evangelical Theological Seminary of Maulbronn Abbey in 1891. The pupils lived and studied at the abbey, one of Germany's most beautiful and well-preserved, attending 41 hours of classes a week. Although Hesse did well during the first months, writing in a letter that he particularly enjoyed writing essays and translating classic Greek poetry into German, his time in Maulbronn was the beginning of a serious personal crisis. In March 1892, Hesse showed his rebellious character, and, in one instance, he fled from the Seminary and was found in a field a day later. Hesse began a journey through various institutions and schools and experienced intense conflicts with his parents. In May, after an attempt at suicide, he spent time at an institution in Bad Boll under the care of theologian and minister Christoph Friedrich Blumhardt. Later, he was placed in a mental institution in Stetten im Remstal, and then a boys' institution in Basel. At the end of 1892, he attended the Gymnasium in Cannstatt, now part of Stuttgart. In 1893, he passed the One Year Examination, which concluded his schooling. The same year, he began spending time with older companions and took up drinking and smoking.

On 17 October 1895, Hesse began working in the bookshop in Tübingen, which had a specialized collection in theology, philology, and law. Hesse's tasks consisted of organizing, packing, and archiving the books. After the end of each twelve-hour workday, Hesse pursued his own work, and he spent his long, idle Sundays with books rather than friends. Hesse studied theological writings and later Goethe, Lessing, Schiller, and Greek mythology. He also began reading Nietzsche in 1895, and that philosopher's ideas of "dual…impulses of passion and order" in humankind was a heavy influence on most of his novels.

By 1898, Hesse had a respectable income that enabled financial independence from his parents. During this time, he concentrated on the works of the German Romantics, including much of the work of Clemens Brentano, Joseph Freiherr von Eichendorff, Friedrich Hölderlin, and Novalis. In letters to his parents, he expressed a belief that "the morality of artists is replaced by aesthetics".

Having realised he could make a living as a writer, Hesse finally married Maria Bernoulli (of the famous family of mathematicians) in 1904, while her father, who disapproved of their relationship, was away for the weekend. The couple settled down in Gaienhofen on Lake Constance, and began a family, eventually having three sons. In Gaienhofen, he wrote his second novel, Beneath the Wheel, which was published in 1906. In the following time, he composed primarily short stories and poems. His story "The Wolf", written in 1906–07, was "quite possibly" a foreshadowing of Steppenwolf.

In 1931, Hesse left the Casa Camuzzi and moved with Ninon to a larger house, also near Montagnola, which was built for him to use for the rest of his life, by his friend and patron Hans C. Bodmer. In the same year, Hesse formally married Ninon, and began planning what would become his last major work, The Glass Bead Game (a.k.a. Magister Ludi). In 1932, as a preliminary study, he released the novella Journey to the East.

Hesse observed the rise to power of Nazism in Germany with concern. In 1933, Bertolt Brecht and Thomas Mann made their travels into exile, each aided by Hesse. In this way, Hesse attempted to work against Hitler's suppression of art and literature that protested Nazi ideology. Hesse's third wife was Jewish, and he had publicly expressed his opposition to anti-Semitism long before then. Hesse was criticized for not condemning the Nazi Party, but his failure to criticize or support any political idea stemmed from his "politics of detachment [...] At no time did he openly condemn (the Nazis), although his detestation of their politics is beyond question. In March 1933, seven weeks after Hitler took power, Hesse wrote to a correspondent in Germany, "It is the duty of spiritual types to stand alongside the spirit and not to sing along when the people start belting out the patriotic songs their leaders have ordered them to sing". In the 1930s, Hesse made a quiet statement of resistance by reviewing and publicizing the work of banned Jewish authors, including Franz Kafka. In the late 1930s, German journals stopped publishing Hesse's work, and the Nazis eventually banned it.

According to Hesse, he "survived the years of the Hitler regime and the Second World War through the eleven years of work that [he] spent on . Printed in 1943 in Switzerland, this was to be his last novel. He was awarded the Nobel Prize in Literature in 1946.

During the last twenty years of his life, Hesse wrote many short stories (chiefly recollections of his childhood) and poems (frequently with nature as their theme). Hesse also wrote ironic essays about his alienation from writing (for instance, the mock autobiographies: Life Story Briefly Told and Aus den Briefwechseln eines Dichters) and spent much time pursuing his interest in watercolours. Hesse also occupied himself with the steady stream of letters he received as a result of the Nobel Prize and as a new generation of German readers explored his work. In one essay, Hesse reflected wryly on his lifelong failure to acquire a talent for idleness and speculated that his average daily correspondence exceeded 150 pages. He died on 9 August 1962, aged 85, and was buried in the cemetery of Sant’Abbondio in Gentilino, where his friend and biographer Hugo Ball and another German personality, the conductor Bruno Walter, are also buried.