A nephew of the distinguished physicist Heinrich Hertz, Gustav Hertz was born in Hamburg and educated at the universities of Munich and Berlin. He taught in Berlin and Halle before his appointment in 1928 to the professorship of experimental physics at the Technical University, Berlin. Hertz, as a Jew, was dismissed from his post in 1935. He worked for the Siemens company from 1935 until 1945, somehow managing to survive World War II, when he was captured by the Russians. He reemerged in 1955 to become director of the Physics Institute in Leipzig, then in East Germany.

In 1925 Hertz was awarded the Nobel Prize for physics for his work with James Franck on the quantized nature of energy transfer.