Donnersmarck was born in 1973 in Cologne, West Germany, into the aristocratic Roman Catholic Henckel von Donnersmarck family, and grew up in New York City, Brussels, Frankfurt, and West Berlin. He is fluent in English, German, French, Russian, and Italian. After graduating at the top of his class from the classical high school Evangelisches Gymnasium zum Grauen Kloster, he studied Russian literature in Leningrad for two years and passed the Soviet State Exam for Teachers of Russian as a Foreign Language. He holds a Master of Arts degree in Philosophy, Politics, and Economics at New College, Oxford, and a diploma in Film Directing from the University of Television and Film of Munich.

In 1977, while living as a child in New York, he saw his first movie at the Museum of Modern Art. He expected to see Doctor Dolittle but was "exposed instead to" the German melodrama Varieté. "He cites this experience as the start of his interest in film."

In 1996, he won a directing internship with Richard Attenborough on In Love and War, and then went to study at the Fiction Directing Class of the Hochschule für Fernsehen und Film München (University of Television and Film Munich), Germany, alma mater of Directors as diverse as Wim Wenders and Roland Emmerich. His first short film, Dobermann (which he wrote, produced, directed and edited), broke the school record for the number of awards won by a student production. It became an international festival sensation, and Donnersmarck travelled the festival circuit for over a year.

In 2007, Donnersmarck was one of 115 new members to be invited to join AMPAS.

In a 2010 interview with The Guardian, Director Howard Davies named Donnersmarck as the Artist he most admired.

In 2011, Donnersmark was honoured by the University of Oxford, his alma mater, as one of its 100 most distinguished members from 10 centuries. Other honourees included Duns Scotus, william of Ockham, Erasmus of Rotterdam, Saint Thomas More, John Locke, Christopher Wren, Adam Smith, Lawrence of Arabia, Oscar Wilde, J.R.R. Tolkien and living university alumni Rupert Murdoch, Bill Clinton and Stephen Hawking. For the cover of the 2011 Prospectus, Oxford University named 100 streets in Oxford's historical centre after these graduates. Upper Oxpens Road was renamed in the prospectus for Florian Henckel von Donnersmark.