As Rainier III's health declined, his son's lack of legitimate children became a matter of public and political concern owing to the legal and international consequences. Had Prince Albert died without lawful heirs, it would have triggered Article 3 of the 1918 Franco-Monegasque Treaty, according to which the Principality of Monaco would become a protectorate of the French Republic. Prior to 2002, Monaco's constitution stipulated that only the last reigning prince's "direct and legitimate" descendants could inherit the crown.

The Zoological Garden of Monaco (Jardin Animalier) was founded by Prince Rainier in 1954. Rainier was petitioned unsuccessfully for many years by Virginia McKenna, founder of the Born Free Foundation, to release a pair of leopards at the zoo. Prince Albert met McKenna after his accession to the throne, and agreed to release the leopards as well the zoo's hippo and camel. He intends to convert the Jardin into a zoo for children.

Albert was born in the Prince's Palace of Monaco. He has ancestry from Ireland, Britain, the United States, Germany, France, Mexico, Belgium, and Monaco. He was baptized on April 20, 1958, by Monsignor Jean Delay, archbishop of Marseille, in the Cathedral of the Immaculate Conception of Monaco, before being presented at the balcony of the Palace to the people of Monaco. His godmother was the Spanish queen Victoria Eugenia of Spain, and his godfather was Prince Louis of Polignac. Albert graduated with distinction from the Lycée Albert Premier, in 1976.

He was a camper and later a counselor for six summers at Camp Tecumseh, on Lake Winnipesaukee, Moultonborough, New Hampshire, in the 1970s. He spent a year training in various princely duties and enrolled at Amherst College, in western Massachusetts, in 1977 as Albert Grimaldi, studying political science, economics, music, and English literature; he also joined Chi Psi fraternity. He speaks French, English, German, and Italian.

He spent the summer of 1979 touring Europe and the Middle East with the Amherst Glee Club, and graduated in 1981 with a Bachelor of Arts degree in political science. Albert also undertook an exchange program with the University of Bristol, at the Alfred Marshall School of Economics and Management in 1979.

Prince Albert is the Vice-Chairman of the Princess Grace Foundation-USA, an American charity founded in 1982, after his mother's death, which supports emerging artists in theatre, dance and film, as Princess Grace did in her lifetime.

Albert took part in the 1985 Paris–Dakar Rally, but did not finish it. He also became a judo black belt.

Albert competed in the bobsleigh at five consecutive Winter Olympics for Monaco, taking part in both the two-man and four-man events. In the two-man bobsleigh Albert finished 25th at the 1988 games in Calgary, 43rd at the 1992 games in Albertville, and 31st at the 2002 games. In the four-man bobsleigh Albert finished 27th in 1992, 26th at the 1994 games in Lillehammer, and 28th at both the 1998 games in Nagano and the 2002 games in Salt Lake City. Albert was Monaco's flag bearer at the 1988, 1994, and 1998 Winter Olympics. Albert has been a member of the International Olympic Committee since 1985, and his maternal grandfather, John B. Kelly Sr., and maternal uncle, John B. Kelly Jr., were both Olympic medalists in rowing.

In 1992, an American woman, Tamara Rotolo, filed a paternity suit against the Prince, claiming that he was the father of her daughter, whom she named Jazmin Grace Grimaldi. Prince Albert was also listed as the child's father on Riverside County, California, birth certificate, according to The Desert Sun. The case went to trial in 1993 and was eventually dismissed by Superior Court Judge Graham Anderson Cribbs, who refused jurisdiction and found that there was "insufficient connection between [Prince] Albert and the State of California to justify hearing a suit [in California]" and in doing so essentially accepted the Prince's lawyer's (Stanley Arkin) submissions on that point.

Prior to Albert's marriage, there was much discussion of his continual bachelor status. Although he had received much press attention for dating well-known fashion Models and actresses, his apparent disinclination to marry gave rise to rumours that he was homosexual. Prince Albert has consistently denied suggestions of homosexuality, most notably in a 1994 interview published in the French magazine Madame Figaro. "At first it was amusing", he said, "but it becomes very irritating in the long term to hear people say that I am homosexual". In July 2011, Prince Albert married Charlene Wittstock.

In 1996, Prince Albert received the Eagle Award from the United States Sports Academy. The Eagle Award is the Academy's highest international honor and was awarded to Prince Albert for his significant contributions in promoting international harmony, peace and goodwill through the effective use of sport.

On 2 April 2002, Monaco promulgated Princely Law 1.249, which provides that if a reigning Prince dies without surviving legitimate issue, the throne passes to his legitimate siblings and their legitimate descendants of both sexes, according to the principle of male-preference primogeniture. Following Albert's accession, this law took full effect when ratified by France, pursuant to the Franco-Monégasque Treaty regulating relations between the Principality of Monaco and its neighbor. Prince Albert's sisters and their legitimate children thereby retained the right to inherit the Monegasque throne, which they would have otherwise lost upon the death of Prince Rainier.

Under the current constitution neither Jazmin nor Alex Andre are in the line of succession as they are not Prince Albert's legitimate children, and he emphasized their ineligibility to inherit the throne in statements confirming his paternity. Monegasque law stipulates that any non-adulterine child is legitimised by the eventual marriage of his/her parents, thereupon obtaining the rights to which that child would have been entitled if born in lawful marriage. Thus Alex Andre would have become Monaco's heir apparent under current law if Albert were to marry his son's mother. But in a 2005 exchange with American reporter Larry King, Albert stated that this would not happen.

On 31 May 2006, after a DNA test confirmed the child's parentage, Prince Albert admitted, in a statement from his Lawyer, that he is Jazmin's father. He also extended an invitation for the girl to study, and live in Monaco.

The year 2007 was declared as (International) Year of the Dolphin by the United Nations and United Nations Environment Programme. Prince Albert served as the International Patron of the "Year of the Dolphin", saying "The Year of the Dolphin gives me the opportunity to renew my firm commitment towards protecting marine biodiversity. With this strong initiative we can make a difference to save these fascinating marine mammals from the brink of extinction."

As Monaco's head of state, Prince Albert II is depicted on coins, including collectors' coins, with very rare exceptions. One of the most recent examples is the €5 silver Prince Albert II commemorative coin, the first commemorative coin with his effigy on it, minted in 2008. On the obverse, the Prince is depicted in profile with his name on the top of the coin. On the reverse, the Grimaldi coat of arms appears; around it, the words "Principauté de Monaco" (Principality of Monaco) also appear along with the nominal monetary value of the coin.

On 23 October 2009, Prince Albert was awarded the Roger Revelle Prize for his efforts to protect the environment and to promote scientific research. This award was given to Prince Albert by the Scripps Institution of Oceanography in La Jolla, California. Prince Albert is the second recipient of this prize.

Prince Albert married former South African Swimmer Charlene Wittstock on 1 July 2011. They announced their engagement on 23 June 2010. They had been seen together since 10 February 2006, when Prince Albert was accompanied by Wittstock to the opening ceremony of the Torino Olympics. They were seen again together at the Monaco Grand Prix. The Prince and Wittstock attended the opening ceremony of the Beijing Olympics in 2008, and both the "Bal de la Rose", and Princess Grace Awards Gala in 2009. They also attended the opening ceremony of the Vancouver Olympics. As a couple, they also attended the wedding of Crown Princess Victoria of Sweden and Daniel Westling in Stockholm four days before their own engagement was announced and the wedding of Prince william, Duke of Cambridge, and Catherine Middleton on 29 April 2011. The wedding took place over two days: the civil marriage ceremony took place on 1 July 2011, followed by the religious ceremony on 2 July 2011.

Although Prince Albert does not directly own the Prince's Palace, he does own – in addition to his mother's childhood home – personal homes in both La Turbie and Marchais.

Albert II is also portrayed as a child briefly in Grace of Monaco (2014).

On August 27, 2015, Prince Albert apologized for Monaco's role in facilitating the deportation of a total of 90 Jews and resistance fighters, of whom only nine survived. "We committed the irreparable in handing over to the neighboring authorities women, men and a child who had taken refuge with us to escape the persecutions they had suffered in France," Albert said at a ceremony in which a monument to the victims was unveiled at the Monaco cemetery. "In distress, they came specifically to take shelter with us, thinking they would find neutrality."

In 2016, Albert purchased his mother's childhood house in the East Falls district of Philadelphia. Upon acquiring Grace Kelly's childhood property, he stated the home might be used as a museum space or as offices for the family's Princess Grace Foundation.

In October 2017, Prince Albert received the Lowell Thomas Award from The Explorers Club, a non-profit group that promotes scientific exploration. The award is presented by the President of the Club on special occasions to groups of outstanding explorers. The Club cited Prince Albert's dedication to the protection of the environment, and that he was the first head of state to reach both the North and South poles.