Kamakawiwoʻole was known for promoting Hawaiian rights and Hawaiian independence, both through his lyrics, which often stated the case for independence directly, and his life. For Example, the lyric in his song "Hawaiʻi '78": "The life of this land is the life of the people/and that to care for the land (malama ʻāina) is to care for the Hawaiian culture", is a statement that many consider to summarise his Hawaiian ideals. The state motto of Hawaiʻi is a recurring line in the song and encompasses the meaning of Iz's message: "Ua Mau ke Ea o ka ʻĀina i ka Pono" (proclaimed by King Kamehameha III when Hawaiʻi regained sovereignty in 1843. It can be roughly translated as: "The life of the land is perpetuated in righteousness").

Kamakawiwoʻole was born at Kuakini Medical Center in Honolulu to Henry "Hank" Kaleialoha Naniwa Kamakawiwoʻole, Jr. and Evangeline "Angie" Leinani Kamakawiwoʻole. The notable Hawaiian musician Moe Keale was his uncle and a major musical influence. He was raised in the community of Kaimuki, where his parents had met and married. He began playing music with his older brother Skippy and cousin Allen Thornton at the age of 11, being exposed to the music of Hawaiian entertainers of the time such as Peter Moon, Palani Vaughn and Don Ho, who frequented the establishment where Kamakawiwoʻole's parents worked. Hawaiian musician Del Beazley spoke of the first time he heard Israel perform, when, while playing for a graduation party, the whole room fell silent on hearing him sing. Israel continued his path as his brother Skippy entered the Army in 1971 and cousin Allen parted ways in 1976 for the mainland.

The Makaha Sons of Niʻihau recorded No Kristo in 1976 and released four more albums, including Kahea O Keale, Keala, Makaha Sons of Niʻihau and Mahalo Ke Akua. In 1982, Kamakawiwoʻole's brother, Skippy, died at age 28 of a heart attack related to obesity. In that same year, Kamakawiwoʻole married his childhood sweetheart Marlene. Soon after, they had a daughter whom they named Ceslieanne "Wehi" (born in c. 1983).

The group became Hawaii's most popular contemporary traditional group with breakout albums 1984's Puana Hou Me Ke Aloha and its follow-up, 1986's Hoʻola. Kamakawiwoʻole's last recorded album with the group was 1991's Hoʻoluana. It remains the group's top-selling CD.

His voice became famous outside Hawaii when his album Facing Future was released in 1993. His medley of "Somewhere Over the Rainbow/What a Wonderful World" was released on his albums Ka ʻAnoʻi and Facing Future. It was subsequently featured in several films, television programs, and television commercials.

In 1994, Kamakawiwoʻole was voted favorite entertainer of the year by the Hawaiʻi Academy of Recording Arts (HARA).

E Ala E (1995) featured the political title song "ʻE Ala ʻE" and "Kaleohano", and N Dis Life (1996) featured "In This Life" and "Starting All Over Again".

At some point in his later years, Israel Iz converted to Christianity. In 1996 he was baptized at the World of Life Christian Center in Honolulu and spoke publicly about his beliefs at the Na Hoku Hanohano Awards. He also recorded the song "Ke Alo O Iesu" (translated as 'The Presence of Jesus').

The Hawaii state flag flew at half-staff on July 10, 1997, the day of Kamakawiwoʻole's funeral. His koa wood coffin lay in state at the state capitol building in Honolulu. He was the third person in Hawaiian history to be awarded this honor, and the only one who was not a government official. Approximately ten thousand people attended the funeral. Thousands of fans gathered as his ashes were scattered into the Pacific Ocean at Mākua Beach on July 12, 1997. According to witnesses, many people on land commemorated him by honking their car and truck horns on all Hawaiian highways that day. Scenes from the funeral and scattering of Kamakawiwoʻole's ashes were featured in official music videos of "Over the Rainbow" released posthumously by Mountain Apple Company. As of March 2018, the two videos as featured on YouTube have collectively received over 500 million views.

Kamakawiwoʻole's recording of "Over the Rainbow/What a Wonderful World" gained notice in 1999 when an excerpt was used in the TV commercials for eToys.com (now part of Toys "R" Us). The full song was featured in the movies K-Pax, Meet Joe Black, Finding Forrester, Son of the Mask, 50 First Dates, Fred Claus and IMAX: Hubble 3D. It was also featured in TV series ER, American Dad!, Scrubs, Cold Case, Glee, South Pacific, Lost, Storm Chasers, and in the UK original version of Life on Mars among others.

Alone in Iz World (2001) debuted at #1 on Billboard's World Chart and #135 on Billboard's Top 200, #13 on the Top Independent Albums Chart, and #15 on the Top Internet Album Sales charts.

On September 20, 2003, hundreds paid tribute to Kamakawiwoʻole as a bronze bust (located at 21°27′00″N 158°11′27″W / 21.45008°N 158.19092°W / 21.45008; -158.19092) of the revered singer was unveiled at the Waianae Neighborhood Community Center on Oʻahu. The singer's widow, Marlene Kamakawiwoʻole, and Sculptor Jan-Michelle Sawyer were present for the dedication ceremony.

"Over the Rainbow/What a Wonderful World" reached #12 on Billboard's Hot Digital Tracks chart the week of January 31, 2004 (for the survey week ending January 18, 2004). It passed the 2 million paid downloads mark in the USA by September 27, 2009, and then sold 3 million in the USA as of October 2, 2011. And as of October 2014, the song has sold over 4.2 million digital copies. In addition, the song holds the distinction of being the longest-leading number one hit on any of the Billboard song charts, having spent 185 weeks at number one on the publication's World Digital Songs chart.

In 1990, Kamakawiwoʻole released his first solo album Ka ʻAnoʻi, which won awards for Contemporary Album of the Year and Male Vocalist of the Year from the Hawaiʻi Academy of Recording Arts (HARA). Facing Future was released in 1993 by The Mountain Apple Company. It featured his most popular song, the medley "Somewhere Over the Rainbow/What a Wonderful World", along with "Hawaiʻi 78", "White Sandy Beach of Hawaiʻi", "Maui Hawaiian Sup'pa Man", and "Kaulana Kawaihae". The decision to include a cover of Somewhere Over the Rainbow was said to be a last-minute decision by his Producer Jon de Mello and him. Facing Future debuted at #25 on Billboard magazine's Top Pop Catalogue chart. On October 26, 2005, Facing Future became Hawaiʻi's first certified platinum album, selling more than a million CDs in the United States, according to figures furnished by the Recording Industry Association of America. On July 21, 2006, BBC Radio 1 announced that "Somewhere Over the Rainbow/What a Wonderful World (True Dreams)" would be released as a single in America.

In April 2007, "Over the Rainbow" entered the UK charts at #68, and eventually climbed to #46, spending 10 weeks in the Top 100 over a 2-year period.

As of November 1, 2010, "Over the Rainbow" peaked at No. 6 on the OE3 Austria charts, which largely reflect airplay on Austria's government-operated Top 40 radio network. It also peaked at No.1 in France and Switzerland in late December 2010.

On March 24, 2011, Kamakawiwoʻole was honored with the German national music award Echo. The music managers Wolfgang Boss and Jon de Mello accepted the trophy in his stead.

A 2014 Pixar short film, Lava, features two volcanoes as the main characters. Israel Kamakawiwoʻole’s cover of "Somewhere Over the Rainbow” and his style of music was James Ford Murphy’s partial inspiration for the short film.

On October 24, 2016 The Healer premiered at the Heartland Film Festival in Indianapolis, which featured "Over the Rainbow".