Embden, the son of a lawyer from Hamburg, was educated at the universities of Freiburg, Munich, Berlin, and Strasbourg. From 1904 he was director of the chemical laboratory in the medical clinic of the Frankfurt hospital, becoming in 1907 director of the Physiological Institute (which evolved from the medical clinic) and in 1914 director of the Institute for Vegetative Physiology (which in its turn evolved from the Physiological Institute).

In 1918 Otto Meyerhof threw considerable light on the process of cellular metabolism by showing that it involved the breakdown of glucose to lactic acid. Embden spent much time in working out the precise steps involved in such a breakdown, as did many other chemists and physiologists. By the time of his death the details of the metabolic sequence from glycogen to lactic acid, later known as the Embden–Meyerhof pathway, had been worked out.

Embden's earlier work concentrated on the metabolic processes carried out by the liver. In his experiments he used a new perfusion technique to maintain the condition of the dissected livers. In this way he discovered the breakdown of amino acids by oxidative deamination, realized that abnormal sugar metabolism can lead to the formation of acetone and acetoacetic acid, and showed that sugar is synthesized from lactic acid.