The Capone family immigrated to the United States, after first moving to nearby Fiume in Austria-Hungary in 1893. From that port city they traveled on a ship to the U.S., where they settled at 95 Navy Street, in the Navy Yard section of downtown Brooklyn. Gabriele Capone worked at a nearby barber shop at 29 Park Avenue. When Al was 11, the Capone family moved to 38 Garfield Place in Park Slope, Brooklyn.

Al Capone was born in the Brooklyn borough of New York City on January 17, 1899. His parents were Italian immigrants Gabriele Capone (1865–1920) and Teresa Capone (née Raiola; 1867–1952). His father was a barber and his mother was a seamstress, both born in Angri, a town in the Province of Salerno.

Capone married Mae Josephine Coughlin at age 19 on December 30, 1918. She was Irish Catholic and earlier that month had given birth to their son Albert Francis "Sonny" Capone. Capone was under the age of 21, and his parents had to consent in writing to the marriage.

At about 20 years of age, Capone left New York for Chicago at the invitation of Johnny Torrio, who was imported by crime boss James "Big Jim" Colosimo as an enforcer. Capone began in Chicago as a bouncer in a brothel, where he contracted syphilis. Timely use of Salvarsan probably could have cured the infection, but he apparently never sought treatment. In 1923, he purchased a small house at 7244 South Prairie Avenue in the Park Manor neighborhood on the city's south side for US$5,500. In the early years of the decade, his name began appearing in newspaper Sports pages where he was described as a boxing promoter. Torrio took over Colosimo's crime empire after Colosimo's murder on May 11, 1920, in which Capone was suspected of being involved.

Torrio headed an essentially Italian organized crime group that was the biggest in the city, with Capone as his right-hand man. He was wary of being drawn into gang wars and tried to negotiate agreements over territory between rival crime groups. The smaller North Side Gang led by Dean O'Banion (also known as Dion O'Banion) was of mixed ethnicity, and it came under pressure from the Genna brothers who were allied with Torrio. O'Banion found that Torrio was unhelpful with the encroachment of the Gennas into the North Side, despite his pretensions to be a settler of disputes. In a fateful step, Torrio either arranged for or acquiesced to the murder of O'Banion at his flower shop in October 1924. This placed Hymie Weiss at the head of the gang, backed by Vincent Drucci and Bugs Moran. Weiss had been a close friend of O'Banion, and the North Siders made it a priority to get revenge on his killers.

In January 1925, Capone was ambushed, leaving him shaken but unhurt. Twelve days later, Torrio was returning from a shopping trip when he was shot several times. After recovering, he effectively resigned and handed control to Capone, age 26, who became the new boss of an organization that took in illegal breweries and a transportation network that reached to Canada, with political and law-enforcement protection. In turn, he was able to use more violence to increase revenue. An establishment that refused to purchase liquor from him often got blown up, and as many as 100 people were killed in such bombings during the 1920s. Rivals saw Capone as responsible for the proliferation of brothels in the city.

He based himself in Cicero, Illinois after using bribery and widespread intimidation to take over town council elections, and this made it difficult for the North Siders to target him. His driver was found tortured and murdered, and there was an attempt on Weiss's life in the Chicago Loop. On September 20, 1926, the North Side Gang used a ploy outside the Capone headquarters at the Hawthorne Inn, aimed at drawing him to the windows. Gunmen in several cars then opened fire with Thompson submachine guns and shotguns at the windows of the first-floor restaurant. Capone was unhurt and called for a truce, but the negotiations fell through. Three weeks later, Weiss was killed outside the former O'Banion flower shop North Side headquarters. The owner of Hawthorne's restaurant was a friend of Capone's, and he was kidnapped and killed by Moran and Drucci in January 1927.

Assistant Attorney General Mabel Walker Willebrandt recognized that mob figures publicly led lavish lifestyles yet never filed tax returns, and thus could be convicted of tax evasion without requiring hard evidence to get testimony about their other crimes. She tested this approach by prosecuting a South Carolina bootlegger. In 1927, the Supreme Court ruled in that case that illegally earned income was subject to income tax; Justice Oliver Wendell Holmes Jr. rejected the argument that the Fifth Amendment protected Criminals from reporting illegal income. The IRS special investigation unit chose Frank J. Wilson to investigate Capone, with the focus on his spending. The key to Capone's conviction on tax charges was proving his income, and the most valuable evidence in that regard originated in his offer to pay tax. Ralph, his brother and a gangster in his own right, was tried for tax evasion in 1930. Ralph spent the next three years in prison after being convicted in a two-week trial over which Wilkerson presided. Capone ordered his Lawyer to regularize his tax position. Crucially, during the ultimately abortive negotiations that followed, his Lawyer stated the income that Capone was willing to pay tax on for various years, admitting income of $100,000 for 1928 and 1929, for instance. Hence, without any investigation, the government had been given a letter from a Lawyer acting for Capone conceding his large taxable income for certain years. In 1931, Capone was charged with income tax evasion, as well as with various violations of the Volstead Act (Prohibition) at the Chicago Federal Building in the courtroom of Judge James Herbert Wilkerson. U. S. Attorney George E. Q. Johnson agreed to a deal that he hoped might result in the judge giving Capone a couple of years, but Judge Wilkerson had been aware of the deal all along and refused to allow Capone to plead guilty for a reduced sentence. On the second day of the trial, Judge Wilkerson overruled objections that a Lawyer could not confess for his client, saying that anyone making a statement to the government did so at his own risk. Wilkerson deemed that the 1930 letter to federal authorities could be admitted into evidence from a Lawyer acting for Capone.

Capone continued to back Thompson. Voting booths were targeted by Capone's bomber James Belcastro in the wards where Thompson's opponents were thought to have support, on the polling day of April 10, 1928, in the so-called Pineapple Primary, causing the deaths of at least 15 people. Belcastro was also accused of the murder of Lawyer Octavius Granady, an African American who challenged Thompson's candidate for the African American vote, and was chased through the streets on polling day by cars of gunmen before being shot dead. Four policemen were among those charged along with Belcastro, but all charges were dropped after key witnesses recanted their statements. An indication of the attitude of local law enforcement to Capone's organization came in 1931 when Belcastro was wounded in a shooting; police suggested to skeptical journalists that Belcastro was an independent operator.

On March 27, 1929, Capone was arrested by FBI agents as he left a Chicago courtroom after testifying to a grand jury that was investigating violations of federal prohibition laws. He was charged with contempt of court for feigning illness to avoid an earlier appearance. In May 1929, Capone was sentenced to a prison term in Philadelphia's Eastern State Penitentiary; he was convicted within 16 hours of being arrested for carrying a gun during a trip there. A week after his release in March 1930, Capone was listed as the number one "Public Enemy" on the unofficial Chicago Crime Commission's widely publicized list.

In April 1930, Capone was arrested on vagrancy charges when visiting Miami Beach; the governor had ordered sheriffs to run him out of the state. Capone claimed that Miami police had refused him food and water and threatened to arrest his family. He was charged with perjury for making these statements, but was acquitted after a three-day trial in July. In September, a Chicago judge issued a warrant for Capone's arrest on charges of vagrancy, and then used the publicity to run against Thompson in the Republican primary. In February 1931, Capone was tried on the contempt of court charge. In court, Judge James Herbert Wilkerson intervened to reinforce questioning of Capone's Doctor by the prosecutor. Wilkerson sentenced Capone to six months, but he remained free while on appeal of the contempt conviction.

The 1929 Saint Valentine's Day Massacre led to public disquiet about Thompson's alliance with Capone and was a factor in Anton J. Cermak winning the mayoral election on April 6, 1931.

Capone was sent to Atlanta U.S. Penitentiary in May 1932, aged 33. Upon his arrival at Atlanta, the 250-pound (110 kg) Capone was officially diagnosed with syphilis and gonorrhoea. He was also suffering from withdrawal symptoms from cocaine addiction, the use of which had perforated his septum. Capone was competent at his prison job of stitching soles on shoes for eight hours a day, but his letters were barely coherent. He was seen as a weak personality, and so out of his depth dealing with bullying fellow inmates that his cellmate, seasoned convict Red Rudinsky, feared that Capone would have a breakdown. Rudinsky was formerly a small-time Criminal associated with the Capone gang, and found himself becoming a protector for Capone. The conspicuous protection of Rudinsky and other prisoners drew accusations from less friendly inmates, and fueled suspicion that Capone was receiving special treatment. No solid evidence ever emerged, but it formed part of the rationale for moving Capone to the recently opened Alcatraz Federal Penitentiary off the coast of San Francisco. On June 23, 1936, Capone was stabbed and superficially wounded by James C. Lucas.

At Alcatraz, Capone's decline became increasingly evident as neurosyphilis progressively eroded his mental faculties. He spent the last year of his sentence in the prison hospital, confused and disoriented. Capone completed his term in Alcatraz on January 6, 1939, and was transferred to the Federal Correctional Institution at Terminal Island in California to serve out his sentence for contempt of court. He was paroled on November 16, 1939.

After Capone was released from prison, he was referred to Johns Hopkins Hospital in Baltimore for the treatment of paresis (caused by late-stage syphilis). Hopkins refused to admit him based solely on his reputation, but Union Memorial Hospital accepted him. Capone was grateful for the compassionate care that he received and donated two Japanese weeping cherry trees to Union Memorial Hospital in 1939. A very sickly Capone left Baltimore on March 20, 1940, after a few weeks inpatient and a few weeks outpatient, for Palm Island, Florida.

In 1946, his physician and a Baltimore Psychiatrist performed examinations and concluded that Capone had the mentality of a 12-year-old child. Capone spent the last years of his life at his mansion in Palm Island, Florida. On January 21, 1947, Capone had a stroke. He regained consciousness and started to improve, but contracted pneumonia. He suffered a cardiac arrest on January 22. On January 25, Capone died in his home, surrounded by his family. He wаs originally buried at Mount Olivet Cemetery (Chicago). In 1950 Capone's remains, along with those of his father and brother Salvatore, were moved to Mount Carmel Cemetery in Hillside, Illinois.

The main effect of Capone's conviction was that he ceased to be boss immediately on his imprisonment, but those involved in the jailing of Capone portrayed it as considerably undermining the city's organized crime syndicate. Far from being smashed, the Chicago Outfit continued without being troubled by the Chicago police, but at a lower level and without the open violence that had marked Capone's rule. Organized crime in the city had a lower profile once Prohibition was repealed, already wary of attention after seeing Capone's notoriety bring him down, to the extent that there is a lack of consensus among Writers about who was actually in control and who was a figurehead "front boss". Prostitution, labor union racketeering, and gambling became moneymakers for organized crime in the city without incurring serious investigation. In the late 1950s, FBI agents discovered an organization led by Capone's former lieutenants reigning supreme over the Chicago underworld.

Capone was born in Brooklyn, New York City, to Italian immigrants. He was a Five Points Gang member who became a bouncer in organized crime premises such as brothels. In his early twenties, he moved to Chicago and became a bodyguard and trusted factotum for Johnny Torrio, head of a Criminal syndicate that illegally supplied alcohol—the forerunner of the Outfit—and was politically protected through the Unione Siciliana. A conflict with the North Side Gang was instrumental in Capone's rise and fall. Torrio went into retirement after North Side gunmen almost killed him, handing control to Capone. Capone expanded the bootlegging Business through increasingly violent means, but his mutually profitable relationships with mayor william Hale Thompson and the city's police meant he seemed safe from law enforcement.