Willstätter was the son of a textile merchant from Karlsruhe in Germany. He was educated at the University of Munich, receiving his PhD in 1894 for work on cocaine. He was professor of chemistry in Zurich from 1905 to 1912, when he left to work in the Kaiser Wilhelm Institute in Berlin. In 1916 he succeeded Adolf von Baeyer to the chemistry chair at Munich. He resigned in 1924 in protest at the growing anti-Semitism in Germany but remained in his homeland until he felt his own life was no longer safe, going into exile in Switzerland in 1939.

His early work was mainly on the structure of alkaloids – he managed to throw light on such important compounds as cocaine, which he synthesized in 1923, and atropine. In 1905 he began work on the chemistry of chlorophyll. By using the chromatographic techniques developed by Mikhail Tsvet, he was soon able to show that it consists of two compounds, chlorophyll a and b, and to work out their formulas. One of the significant features he noted was that chlorophyll contains a single atom of magnesium in its molecule, just as hemoglobin contains a single iron atom. He also investigated other plant pigments, including the yellow pigment carotene and the blue pigment anthocyanin. His work on chlorophyll was justified in 1960 when Robert Woodward succeeded in synthesizing the compounds described by his formulas and came up with chlorophyll.

Willstätter was less successful with his enzyme theory. In the 1920s he claimed to have isolated active enzymes with no trace of protein. His views were widely accepted until protein was restored to its rightful place in enzyme activity by the work of John Northrop in 1930.

For his work on plant pigments Willstätter was awarded the Nobel Prize for chemistry in 1915.