Thunberg, who was born at Jönköping in Sweden, studied medicine at Uppsala University, graduating in 1770. While there he went on botanical collecting trips for his teacher Linnaeus. After a year's study in Paris he accepted an invitation to make a plant-collecting trip aboard a Dutch merchant ship bound for Japan. By April 1772 Thunberg had completed the first stage of the journey with his arrival in Cape Town, South Africa. He remained there for three years, during which time he made three excursions into the interior on which he collected over 3000 species of plants. About a third of these were new to science. On two of his trips he was accompanied by the British plant collector Francis Masson.

In March 1775 Thunberg sailed on to Japan, arriving at Nagasaki in August. Restrictions imposed on the movements of foreigners at that time prevented him from making long botanical excursions. However, with the aid of some young Japanese physicians whom the traders employed as interpreters, Thunberg was able to obtain species of Japanese plants in exchange for his knowledge of modern European medicine. In December 1776 he left Japan and visited Java, Colombo (Sri Lanka), Cape Town, and London before reaching Sweden in March 1779. On his return Thunberg took up his appointment as botanical demonstrator at Uppsala University and in 1784 he succeeded Carl von Linné (the younger) as professor of botany, a post he held until his death.

Thunberg's time as professor was mainly occupied with writing about his extensive collections. In 1784 he published his Flora Japonica, describing 21 new genera and several hundred new species of Japanese plants. His works on floras of the Cape colony include Prodromus Plantarum Capensis (1794–1800; Foreword to the Plants of the Cape) and the more important Flora Capensis (1807–23; Flowers of the Cape), completed with the help of the German botanist Joseph Schultes. His shorter works include writings on Protea, Oxalis, Ixia, and Gladiolus.