K. R. Narayanan was born in a small thatched hut at Perumthanam, Uzhavoor, as the fourth of seven children of Kocheril Raman Vaidyar, a practitioner of the traditional Indian medical systems of Siddha, Ayurveda and Punnaththuraveettil Paappiyamma. His family (belonging to the Paravan caste, whose members are assigned the task of plucking coconuts as per the caste system) was poor, but his father was respected for his medical acumen. He was born on 4 February 1921, but his uncle, who accompanied him on his first day in school, did not know his actual date of birth, and arbitrarily chose 27 October 1920 for the records; Narayanan later chose to let it remain official.

Narayanan had his early schooling in Uzhavoor at the Government Lower Primary School, Kurichithanam (where he enrolled on 5 May 1927) and Our Lady of Lourdes Upper Primary School, Uzhavoor (1931–35). He walked to school for about 15 kilometres daily through paddy fields, and was often unable to pay the modest fees. He often listened to school lessons while standing outside the classroom, having been barred from attending because tuition fees were outstanding. The family lacked money to buy books and his elder brother K. R. Neelakantan, who was confined to home as he was suffering from asthma, used to borrow books from other students, copy them down, and give them to Narayanan. He matriculated from St. Mary's High School, Kuravilangad (1936–37) (he had studied at St. John's High School, Koothattukulam (1935–36) previously). He completed his intermediate at C. M. S. College, Kottayam (1938–40), aided by a scholarship from the Travancore Royal family.

Narayanan obtained his B. A. (Honours) and M.A. in English literature from the University of Travancore (1940–43) (present day University of Kerala), standing first in the university (thus becoming the first Dalit to obtain this degree with first class in Travancore).

With his family facing grave difficulties, he left for Delhi and worked for some time as a Journalist with The Hindu and The Times of India (1944–45). During this time he once interviewed Mahatma Gandhi in Bombay on his own volition (10 April 1945). Narayanan then went to England (1945) and studied political science under Harold Laski at the London School of Economics (LSE); he also attended lectures by Karl Popper, Lionel Robbins, and Friedrich Hayek. He obtained the honours degree of B. Sc. (Economics) with a specialisation in political science, helped by a scholarship from J. R. D. Tata. During his years in London, he (along with fellow student K. N. Raj) was active in the India League under V. K. Krishna Menon. He was also the London correspondent of the Social Welfare Weekly published by K. M. Munshi. He shared lodgings with K. N. Raj and Veerasamy Ringadoo (who later became the first President of Mauritius); another close friend was Pierre Trudeau (who later became Prime minister of Canada).

When Narayanan returned to India in 1948, Laski gave him a letter of introduction to Prime minister Jawaharlal Nehru. Years later, he narrated how he began his career in the public service:

While working in Rangoon, Burma (Myanmar), K. R. Narayanan met Ma Tint Tint, whom he later married in Delhi on 8 June 1951. Ma Tint Tint was active in the YWCA and on hearing that Narayanan was a student of Laski, approached him to speak on political freedom before her circle of acquaintances. Their marriage needed a special dispensation from Nehru as per Indian law, because Narayanan was in the IFS and she was a foreigner. Ma Tint Tint adopted the Indian name Usha and became an Indian citizen. Usha Narayanan (1923–2008) worked on several social welfare programs for women and children in India and completed her Masters in Social Work from Delhi School of Social Work. She also translated and published several Burmese short stories; a collection of translated stories by Thein Pe Myint, titled Sweet and Sour, appeared in 1998. She is the second woman of foreign origin to have become the First Lady. They have two daughters, Chitra Narayanan (Indian ambassador to Switzerland and The Holy See) and Amrita.

In 1949, he joined the Indian Foreign Service (IFS) on Nehru's request. He worked as a diplomat in the embassies at Rangoon, Tokyo, London, Canberra, and Hanoi. He was the Indian ambassador to Thailand (1967–69), Turkey (1973–75), and the People's Republic of China (1976–78). He taught at the Delhi School of Economics (DSE) (1954), and was Jawaharlal Nehru fellow (1970–72) and secretary to the ministry of external affairs (1976). He retired in 1978. After his retirement, he served as the Vice-Chancellor of Jawaharlal Nehru University (JNU) in New Delhi from 3 January 1979 – 14 October 1980; he would later describe this experience as the foundation for his public life. Subsequently, he was recalled from retirement to serve as Indian Ambassador to the United States from 1980–84, under the Indira Gandhi administration. Narayanan's tenures as Indian ambassador to China, the first such high level Indian diplomatic posting in that country after the 1962 Sino-Indian War, and to the USA where he helped arrange Ms. Gandhi's landmark 1982 visit to Washington during the Reagan presidency helped mend India's strained relations with both these countries. Nehru, who had also been the Minister for External Affairs during his 16 years as PM, held that K. R. Narayanan was "the best diplomat of the country."(1955)

Narayanan entered politics at the request of Indira Gandhi and won three successive general elections to the Lok Sabha in 1984, 1989 and 1991, as a representative of the Ottapalam constituency in Palakkad, Kerala, on a Congress ticket. He was a Minister of State in the Union cabinet under Rajiv Gandhi, holding the portfolios of Planning (1985), External Affairs (1985–86), and Science and Technology (1986–89). As a Member of Parliament, he resisted international pressure to tighten patent controls in India. He sat in the opposition benches when the Congress was voted out of power during 1989–91. Narayanan was not included in the cabinet when the Congress returned to power in 1991. K. Karunakaran, Congress Chief Minister of Kerala, a political adversary of his, informed him that he was not made a minister because of him being a "Communist fellow-traveller". He did not, however, respond when Narayanan pointed out that he had defeated Communist candidates (A. K. Balan and Lenin Rajendran, the latter twice) in all three elections.

K. R. Narayanan was elected as the Vice-President of India on 21 August 1992, under the Presidency of Shankar Dayal Sharma. His name had been proposed initially by V. P. Singh, former Prime Minister and the then leader of the Janata Dal parliamentary party. The Janata Dal and the parliamentary left parties had jointly declared him as their candidate, and this had later garnered support from the Congress under P. V. Narasimha Rao, leading to a unanimous decision on his election. On his relationship with the Left front, Narayanan later clarified that he was neither a devotee nor a blind opponent of Communism; they had known of his ideological differences, but had supported him as Vice-President (and later as President) because of special political circumstances that prevailed in the country. He had benefited from their support, and in turn, their political positions had gained acceptability. When the Babri Masjid was demolished on 6 December 1992, he described the event as the "greatest tragedy India has faced since the assassination of Mahatma Gandhi".

President Narayanan returned for reconsideration the advices from the Union cabinet to impose President's rule in a state, in accordance with Article 356, in two instances: one from the Gujral government (22 October 1997) seeking to dismiss the Kalyan Singh government in Uttar Pradesh, and the other from the Vajpayee government (25 September 1998) seeking to dismiss the Rabri Devi government in Bihar. In both instances, he cited the Supreme court judgement of 1994 on S. R. Bommai vs. Union of India and exercised his discretion. In both cases, the cabinet honoured the President's reservations. These remain the only occasions when a President urged such a reconsideration, and has set an important precedent concerning federalism and the rights of state governments.

In the general elections of 1998, K. R. Narayanan became the first sitting President to vote (16 February 1998), casting his vote at a polling booth in a school within the Rashtrapati Bhavan complex after standing in a queue like an ordinary citizen. He insisted on casting his vote, despite the departure from precedent being pointed out to him. Narayanan sought to change what was a long-standing practice of Indian Presidents not voting during general elections. He also exercised his franchise as President in the 1999 general elections.

When the Australian missionary and social worker Graham Staines and his two minor sons were burned alive (22 January 1999), President Narayanan condemned it as a barbarous crime belonging to the world's inventory of black deeds.

He felt that the policy of reservations for the backward sections in education and the public sector had remained unfulfilled due to administrative distortions and narrow interpretations, and needed to be implemented with renewed vigour and sincerity; apprehensive of what he described as a counter-revolution among some privileged sections seeking to reverse progressive policies, he reminded the nation that these benefits were not charity, but had been provided by way of human rights and social justice to sections constituting a large portion of the population and contributing to the economy as landless agricultural labourers and industrial workers. In his 2002 Republic day address, he drew attention to the Bhopal Declaration on the Dalit and Adivasi agenda for the 21st century and spoke of the necessity of the private sector adopting policies to promote equitable representation of the backward sections in their enterprises. In a governmental note on higher judicial appointments (which leaked to the press; January 1999), he observed that eligible persons from the backward sections were available and that their under-representation or non-representation was not justifiable; K. G. Balakrishnan, a Dalit, was elevated to the Supreme court (8 June 2000), the fourth such instance, and the only one since 1989.

In his farewell address to the nation (24 July 2002), K. R. Narayanan set his hopes for social action and progress on the Service of the nation by its youth. He reflected on his varied experiences of the essential goodness and wisdom of the Indian people, recalling how he had grown up in Uzhavoor among adherents of several religions, how religious tolerance and harmony had prevailed, how upper-caste Hindus and well-off Christians had helped him in his early studies, and how upper-caste Hindus as well as Christians and Muslims had worked together enthusiastically for his election campaigns in Ottapalam. He said that the credibility and endurance of India's unity and democracy are founded on its tradition of tolerance, and spoke of the need for Hindus, who form the majority, to express the traditional spirit of their religion.

At the World Social Forum (WSF) in Mumbai (21 January 2004), he lent his support to the alternative globalisation movement. Addressing the forum at its concluding session, he praised the WSF for demanding freedom in its most comprehensive form, and was happy that people had assembled under an important idea, rather than for narrow political ends; after reflecting on corporations displacing governments in various countries, and on how Mahatma Gandhi had fought British colonisers non-violently with the strength of the masses, he predicted that vocal masses the world over would successfully fight by non-violent means the capturing of the world's resources by a few corporations in the name of globalisation. He urged the people to struggle against power corporates and militarism and fight those aspects of globalisation which were against the interests of the people; he hailed people's power as a renascent factor of international politics.

The K. R. Narayanan Foundation (K.R.N.F) founded in December 2005, aims at propagating the ideals and perpetuating the memory of K. R. Narayanan. K.R.N.F is a mission of collective action to provide better Future to the most vulnerable sections of Kerala Society – women, children, disabled persons, the aged and other disadvantaged groups – by providing educational training, protecting their health and environment, improving their living conditions and strengthening their family and community. The paradigms of K.R.N.F revolves around five crucial elements;

In these decisions, President Narayanan set a new precedent concerning the appointment of a Prime minister – if no party or pre-election coalition had a majority, then a person would be appointed Prime minister only if he was able to convince the President (through letters of support from allied parties) of his ability to secure the confidence of the house. In doing so, he diverged from the actions of his predecessors who had been faced with the task of appointing a Prime minister from a hung parliament, Presidents N. Sanjiva Reddy, R. Venkataraman, and Shankar Dayal Sharma: the latter two had followed the practice of inviting the leader of the single largest party or pre-election coalition to form the government without investigating their ability to secure the confidence of the house.