Born at Neuss in Germany, Schwann was educated at the universities of Bonn, Würzburg, and Berlin where he obtained his MD in 1834. He worked with Johannes Müller in Berlin from 1834 until 1838 when he moved to Belgium, serving as professor of anatomy first at Louvain (1838–47) and thereafter at Liège until his death.

Schwann's first experiments at Berlin were on muscle contraction. He showed that the mechanism of contraction could be explained without invoking any vital principles – a marked departure from the teachings of Müller. This mechanistic philosophy was fruitfully developed by Schwann's successors at Berlin, Emil du Bois-Reymond and Hermann von Helmholtz. Schwann next conducted some experiments to disprove (again) the theory of spontaneous generation, which was enjoying a renaissance in the mid 1830s. One unexpected outcome of his experiments on putrefaction and fermentation was his discovery in 1836, independently of Cagniard de la Tour, that yeast is involved in fermentation. The same year Schwann also discovered the digestive enzyme pepsin.

His most memorable achievement however is his Mikroskopische Untersuchungen (1839; Microscopical Researches) in which he first formulated, at the same time as Matthias Schleiden, the most important of all ideas in modern biology, namely that “cellular formation might be a widely extended, perhaps a universal principle for the formation of organic substances.”

In 1838 Schleiden had proposed that all plant tissue was composed of nucleated cells. Using the newly introduced achromatic microscope Schwann went on to examine a variety of tissues taken from several different animals. He surmised that fibers, ducts, etc., do not form directly from molecules but rather are built up from cells. The process of cell formation he saw as something like that of crystallization: cells were not formed from other cells but somehow condensed out of intercellular ‘nutrient liquid’. One further radical misconception was that the cellular material, Schwann's cytoblastema, was devoid of structure.

Despite such errors the cell theory met with rapid acceptance. Improvements were soon made. Robert Remak first described cell division in 1841 and by 1855 Rudolf Virchow could issue the new dogma omnis cellula e cellula (all cells come from cells). The cytoblastema also came in for revision; renamed protoplasm, it was shown by Max Schultze in 1861 to have definite properties and a structure.

Despite these successes Schwann's work on fermentation was savagely criticized by leading chemists of the time, notably Justus von Liebig and Friedrich Wöhler. A particularly damaging paper by the pair was published in 1839 after which Schwann found it impossible to continue his career in Germany. In Belgium he conscientiously carried out his professional duties and invented some useful equipment for the mining industry. His brilliant contributions to physiology, however, virtually ceased. Not until Pasteur's work in the 1850s was Schwann vindicated.