Diesenhofer, who was born in Zusamaltheim, Germany, obtained his PhD from the Max Planck Institute for Biochemistry, at Martinsried near Munich, in 1974. He remained at the Institute until 1987 when he moved to America to work at the Howard Hughes Medical Institute, Dallas, Texas.

In 1982 Hartmut Michel had succeeded in crystallizing the membrane proteins of the photosynthetic reaction center. Clearly, to understand how photosynthesis worked at the molecular level it would be necessary to determine the structure of these proteins, and Michel invited his colleague Diesenhofer to tackle the problem. By 1985, using the well-established techniques of x-ray crystallography, Diesenhofer's group had managed to locate the position of more than 10,000 atoms.

Diesenhofer's analysis revealed complex protein structures holding a molecular cluster containing four chorophyll molecules, two pheophytins (molecules resembling chlorophyll), two quinones (dehydrogenizing agents), and a single iron atom. It has been possible to show how this center can transform energy from incident photons. On absorbing a photon, one of the chlorophyll molecules releases an electron. This is transferred by the pheophytins and quinones to the membrane's outer surface. At the same time, an adjoining cytochrome molecule donates an electron to one of the chlorophyll molecules and thus gains a positive charge. In this way the photon energy has been stored in the charge separation of the negative electron and the positive cytochrome. And so begins the molecular process of photosynthesis.

For this work Diesenhofer shared the 1988 Nobel Prize for chemistry with Hartmut Michel and his departmental head Robert Huber (1937– ).