Hofmannsthal was born in Vienna, the son of a bank manager. He began to write poems and plays from an early age. He met the German poet Stefan George at the age of seventeen, and had several poems published in George's journal, Blätter für die Kunst. He studied law, and later philology in Vienna, but decided to devote himself to writing upon graduating in 1901.
In 1912 he adapted the 15th century English morality play Everyman as Jedermann, and Jean Sibelius wrote incidental music for it. The play became a staple at the Salzburg Festival, which Hofmannsthal founded with Max Reinhardt in 1920. His later plays displayed an increasing interest with religious, and particularly with Roman Catholic themes.
He died in Rodaun near Vienna.