In 1857 German Doctor Justinus Kerner had published a popular book of poems, each of which was inspired by an accidental inkblot, and it has been speculated that the book was known to Rorschach. French Psychologist Alfred Binet had also experimented with inkblots as a creativity test.

Rorschach's father, an art Teacher, encouraged him to express himself creatively through painting and drawing conventional pictures. As the time of his high school graduation approached, he could not decide between a career in art and one in science. He wrote a letter to the famous German Biologist Ernst Haeckel asking his advice. The scientist suggested science, and Rorschach enrolled in medical school at the University of Zurich. Rorschach began learning Russian, and in 1906, while studying in Berlin, he traveled to Russia for a holiday.

Rorschach graduated in Medicine at Zurich in 1909 and at the same time became engaged to Olga Stempelin, a girl from Kazan (in the present-day Republic of Tatarstan, Russia). At the end of 1913, after graduation, he married Stempelin, and the couple moved to live in Russia. They had two children, a daughter Elizabeth (called "Lisa", 1917–2006) and a son, Ulrich Wadin (called "Wadim", 1919–2010). Neither Lisa nor Wadim had children, and thus Rorschach had no grandchildren and has no living descendants.

By July 1914 Rorschach had returned to Switzerland, where he served as an assistant Director at the regional psychiatric hospital at Herisau, and in 1921 he wrote his book Psychodiagnostik, which was to form the basis of the inkblot test. In 2001, the inkblot test was criticised as pseudoscience and its use was declared controversial. In 2013 and 2015 two systemic reviews and meta-analyses were published that resulted in the criticism as pseudoscience to be lifted.

One year after writing his book, Rorschach died of peritonitis, probably resulting from a ruptured appendix. He was still associate Director of the Herisau Hospital when he died at the age of 37, on 1 April 1922.

In November 2013, Google celebrated the 129th anniversary of Rorschach's birth with a Google Doodle showing an interpretation of his inkblot test.