Jean Paul was born at Wunsiedel, in the Fichtelgebirge mountains (Franconia). His father was an organist at Wunsiedel. In 1765 his father became a pastor at Joditz near Hof and, in 1767 at Schwarzenbach, but he died on 25 April 1779, leaving the family in great poverty. After attending the Gymnasium at Hof, in 1781 Jean Paul went to the University of Leipzig. His original intention was to enter his father's profession, but theology did not interest him, and he soon devoted himself wholly to the study of literature. Unable to maintain himself at Leipzig he returned in 1784 to Hof, where he lived with his mother. From 1787 to 1789 he served as a tutor at Töpen, a village near Hof; and from 1790 to 1794 he taught the children of several families in a school he had founded in nearby Schwarzenbach.

Jean Paul began his career as a man of letters with Grönländische Prozesse ("Greenland Lawsuits"), published anonymously in Berlin in 1783–84, and Auswahl aus des Teufels Papieren ("Selections from the Devil's Papers", signed J. P. F. Hasus), published in 1789. These works were not received with much favour, and in later life even their author had little sympathy for their satirical tone.

Jean Paul's outlook was profoundly altered by a spiritual crisis he suffered on November 15, 1790, in which he had a vision of his own death. His next book, Die unsichtbare Loge ("The Invisible Lodge"), a romance published in 1793 under the pen-name Jean Paul (in honour of Jean-Jacques Rousseau), had all the qualities that were soon to make him famous, and its power was immediately recognized by some of the best critics of the day.

Encouraged by the reception of Die unsichtbare Loge, Richter composed a number of books in rapid succession: Leben des vergnügten Schulmeisterleins Maria Wutz in Auenthal ("Life of the Cheerful Schoolmaster Maria Wutz", 1793), the best-selling Hesperus (1795), which made him famous, Biographische Belustigungen unter der Gehirnschale einer Riesin ("Biographical Recreations under the Brainpan of a Giantess", 1796), Leben des Quintus Fixlein ("Life of Quintus Fixlein", 1796), Der Jubelsenior ("The Parson in Jubilee", 1797), and Das Kampaner Tal ("The Valley of Campan", 1797). Also among these was the novel Blumen- Frucht- und Dornenstücke, oder Ehestand, Tod, und Hochzeit des Armenadvokaten Siebenkäs ("Flower, Fruit, and Thorn Pieces; or, the Married Life, Death, and Wedding of Siebenkäs, Poor Man's Lawyer") in 1796–97.

After his mother's death in 1797, Richter went to Leipzig, and in the following year, to Weimar, where he started work on his most ambitious novel, Titan, published between 1800–1803. Richter became friends with such Weimar notables as Johann Gottfried Herder, by whom he was warmly appreciated, but despite their close proximity, Richter never became close to Johann Wolfgang von Goethe or Friedrich Schiller, both of whom found his literary methods repugnant; but in Weimar, as elsewhere, his remarkable conversational powers and his genial manners made him a favorite in general society. The English Writers Thomas Carlyle and Thomas De Quincey took an interest in Jean Paul's work.

In 1801 he married Caroline Meyer, whom he had met in Berlin the year before. They lived first at Meiningen, then at Coburg; and finally, in 1804, they settled at Bayreuth. Here Richter spent a quiet, simple, and happy life, constantly occupied with his work as a Writer. In 1808 he was fortunately delivered from anxiety about outward necessities by Prince Primate Karl Theodor von Dalberg, who gave him an annual pension of 1,000 florins, which was later continued by the king of Bavaria.

Jean Paul's Titan was followed by Flegeljahre ("The Awkward Age", 1804-5). His later imaginative works were Dr Katzenbergers Badereise ("Dr Katzenberger's Trip to the Medicinal Springs", 1809), Des Feldpredigers Schmelzle Reise nach Flätz ("Army Chaplain Schmelzle's Voyage to Flätz", 1809), Leben Fibels ("Life of Fibel", 1812), and Der Komet, oder Nikolaus Marggraf ("The Comet, or, Nikolaus Markgraf", 1820–22). In Vorschule der Aesthetik ("Introduction to Aesthetics", 1804) he expounded his ideas on art; he discussed the principles of education in Levana, oder Erziehungslehre ("Levana, or, Pedagogy", 1807); and the opinions suggested by current events he set forth in Friedenspredigt ("Peace Sermon", 1808), Dämmerungen für Deutschland ("Twilights for Germany", 1809), Mars und Phöbus Thronwechsel im Jahre 1814 ("Mars and Phoebus Exchange Thrones in the Year 1814", 1814), and Politische Fastenpredigten ("Political Lenten Sermons", 1817). In his last years he began Wahrheit aus Jean Pauls Leben ("The Truth from Jean Paul's Life"), to which additions from his papers and other sources were made after his death by C. Otto and E. Förster.

Also during this time he supported the younger Writer E. T. A. Hoffmann, who long counted Richter among his influences. Richter wrote the preface to Fantasy Pieces, a collection of Hoffmann's short stories published in 1814.

In September 1821 Jean Paul lost his only son, Max, a youth of the highest promise; and he never quite recovered from this shock. He lost his sight in 1824, and died of dropsy at Bayreuth, on 14 November 1825.

He thought that both the Enlightenment and metaphysics had failed, though they still held importance for his worldview. He arrived at a philosophy without illusions, and a state of humorous resignation. Correspondingly he was one of the first defenders of Schopenhauer's philosophy. He didn't try to indoctrinate but to portray human happiness, even (and especially) in an increasingly alienated environment — the rococo castles and bleak villages of Upper Franconia. Jean Paul was not only the first to use and name the literary motif of the Doppelgänger, he also utilised it in countless variations (e.g. Siebenkäs and Leibgeber, Liane and Idoine, Roquairol and Albano). In his novel Siebenkäs he defines the Doppelgänger as the "people who see themselves."