Ravi Varma was the son of Ezhumavil Neelakanthan Bhattatiripad and Umayamba Thampurratti. His mother Uma Ambabayi Thampuratty (or Umayamba Bayi Thampuratty) belonged to the baronial family which ruled the Kilimanoor feudal estate within the kingdom of Travancore. She was a poet and Writer of some talent, and her work Parvati Swayamvaram was published by Varma after her death. Ravi Varma's father was a scholar of Sanskrit and Ayurveda and hailed from the Ernakulam district in Kerala. Ravi Varma had three siblings, a sister named Mangala Bayi and two brothers named Goda Varma (born 1854) and Raja Varma (born 1860). The last-named was also a Painter and worked closely with Ravi Varma all his life.

In 1866, at the age of 18, Varma was married to 12-year-old Bhageerthi Bayi (known formally as Pooruruttati Nal Bhageerathi Bayi Thampuratty) of the royal house of Mavelikkara, another major fief of Travancore kingdom. Notably, the house of Mavellikara was a branch of the Royal House of Travancore. Bhageerthi was the youngest of three sisters, and both of her elder sisters had been adopted into the royal family of Travancore in 1857 in order to carry on the lineage. They were known as the Senior and Junior Rani of Attingal, and in their progeny was vested the succession to the throne of Travancore. Therefore, Ravi Varma's connection to the royal family became very close due to his marriage with Bhageerthi. Indeed, his children (because they belonged to their mother's family) would be royal by birth. The marriage, which was arranged by the parents in the proper Indian manner, was harmonious and successful. The couple were blessed with five children, two sons and three daughters. Their elder son, Kerala Varma (b.1876) was of an excessively spiritual temperament. He never married and eventually renounced the world, leaving home for good in 1912. The younger son, Rama Varma (born 1879), inherited his father's artistic talent and studied at the JJ School of Arts, Mumbai. He was married to Gowri Kunjamma, sister of Dewan PGN Unnithan, and became the father of seven children.

The British administrator Edgar Thurston was significant in promoting the careers of Varma and his brother. Varma received widespread acclaim after he won an award for an exhibition of his paintings at Vienna in 1873. Varma's paintings were also sent to the World's Columbian Exposition held in Chicago in 1893 and he was awarded three gold medals. He travelled throughout India in search of subjects. He often modelled Hindu Goddesses or South Indian women, whom he considered beautiful. Ravi Varma is particularly noted for his paintings depicting episodes from the story of Dushyanta and Shakuntala, and Nala and Damayanti, from the Mahabharata. Ravi Varma's representation of mythological characters has become a part of the Indian imagination of the epics. He is often criticized for being too showy and sentimental in his style but his work remains very popular in India. Many of his fabulous paintings are housed at Laxmi Vilas Palace, Vadodara.

Apparently on the advice of the then Dewan (Prime Minister) of Travancore, T. Madhava Rao, Ravi Varma started a lithographic printing press in Ghatkopar, Mumbai in 1894 and later shifted it to Malavli near Lonavala, Maharashtra in 1899. The oleographs produced by the press were mostly of Hindu gods and goddesses in scenes adapted mainly from the Mahabharata, the Ramayana and the Puranas. These oleographs were very popular and continued to be printed in thousands for many years, even after the 1906 death of Ravi Varma.

The Ravi Varma press was the largest and most innovative press in India at that time. The press was managed by Varma's brother, Raja Varma, but under their management, it was a commercial failure. By 1899 the press was deeply in debt and in 1901, the press was sold to his printing technician from Germany, Fritz Schleicher. Schleicher continued to print Ravi Varma's prints but later employed less talented artists to create new designs. Schleicher also broadened the product of press to include commercial and advertisement labels. Under the management of Schleicher and his successors, the press continued successfully until a devastating fire destroyed the whole factory in 1972. Many of Ravi Varma's original lithographic prints were also lost in the fire.

Two of Varma's grand-daughters were marked by destiny to receive this honour, the main reason being that they were the nearest matrilineal (cognatic) kin to the incumbent Rani of Attingal. In August 1900, Mahaprabha's eldest daughter Lakshmi Bayi (aged 5 years) and Uma's eldest daughter Parvati Bayi (aged 4 years) were adopted into the Royal family of Travancore. It was Bharani Thirunal Lakshmi Bayi, their surviving grand-aunt, who formally adopted them. She died within one year of doing this, and the two girls were then installed as the Senior and Junior Ranis of Attingal respectively. They were married while yet in their early teens to two gentleman from suitable aristocratic families. It was the Junior Rani, Sethu Parvathi Bayi, who gave birth to the much-awaited heir in 1912, exactly a day after her sixteenth birthday. Incidentally, her husband was a grand-nephew of Raja Ravi Varma and belonged to Kilimanoor. The newborn child was the Future Maharaja Chithira Thirunal, the last ruling Maharaja of Travancore. He was followed by a brother (the Future Maharaja Marthanda Varma III) and a sister Lakshmi Bayi, the mother of Maharaja Rama Varma VII who is presently on the throne (since 2013). Meanwhile, the Senior Rani (Sethu Lakshmi Bayi, daughter of Mahaprabha Amma, and Regent in the period 1924-31) also gave birth to two daughters later in life (in 1923 and 1926).

In 1904, Viceroy Lord Curzon, on behalf of the British King Emperor, bestowed upon Varma the Kaisar-i-Hind Gold Medal. A college dedicated to fine arts was also constituted in his honour at Mavelikara, Kerala. Raja Ravi Varma High School at Kilimanoor was named after him and there are many cultural organizations throughout India bearing his name. In 2013, the crater Varma on Mercury was named in his honor. Considering his vast contribution to Indian art, the Government of Kerala has instituted an award called "Raja Ravi Varma Puraskaram", which is awarded every year to people who show excellence in the field of art and culture.