Karrer, the son of a Moscow dentist, was educated at the University of Zurich where he obtained his PhD. After working in Frankfurt he returned to the University of Zurich in 1918, where he served as professor of chemistry until his retirement in 1959.

He began his research career working on the chemistry of plant pigments. Although Karrer tackled a wide variety of such pigments his most significant result was his determination, by 1930, of the structure of carotene, the yellow pigment found in such vegetables as carrots. By 1931 he had also worked out the structure of vitamin A and synthesized it. The similarity between the two molecules did not escape Karrer's attention and it was later shown that vitamin A is derived from the breakdown of carotene in the liver. Karrer went on to synthesize vitamin B₂ (riboflavin) in 1935 and vitamin E (tocopherol) in 1938.

In 1937 Karrer was awarded, along with Norman Haworth, the Nobel Prize for chemistry for his work on the “constitution of carotenoids, flavins, and vitamins A and B.” Karrer was the author of a respected textbook, Lehrbuch der organischen Chemie (1927; Textbook of Organic Chemistry).