Born at Penkhull in England, Lodge entered his father's business in 1865. However, at the age of 22 he resumed a formal education, studying at the Royal College of Science (now part of Imperial College) and at University College, both in London; he was awarded a DSc in 1877. After several teaching posts he was appointed the first professor of physics at University College, Liverpool, in 1881. In 1900 he became the first principal of the new Birmingham University, remaining there until his retirement in 1919. He was knighted in 1902.

Lodge's principal scientific contributions were concerned with the transmission of electromagnetic waves, which led to developments in radio broadcasting. His experiments in the field of electricity started in the late 1870s. In 1887–88 he discovered that electromagnetic waves could be produced by electrical means and transmitted along conducting wires. These results were somewhat overshadowed by the work of Heinrich Hertz who in 1888 succeeded in producing electromagnetic waves, transmitted them through air, and demonstrated their similarities with light waves. In 1894 Lodge made his mark, however, by greatly improving the means of detecting these ‘Hertzian’ waves (now known as radio waves) by developing the coherer. This was an electrical device whose function was based on a discovery made in 1890 by E. Branley: that electrical discharges in certain metallic powders, caused by radio waves, resulted in a drop in electrical resistance.

Lodge is also remembered for his work on the ether, which had been postulated as the wave-bearing medium filling all space. In 1893 he devised an experiment that helped to discredit the theory. Other scientific work included investigations on lightning, the source of the electromotive force in the voltaic cell, electrolysis, and the application of electricity to the dispersal of fog and smoke. He played a part in establishing the National Physical Laboratory.

From 1900 Lodge increasingly devoted himself to administrative work. He was also interested in the history of science and wrote several scientific memoirs. In his writings he made attempts to reconcile what seemed to him the divergence between science and religion.

After 1910 he became deeply involved in psychical research. He believed in the possibility of communicating with the dead, a belief sustained by the hope of somehow communicating with his youngest son Raymond, who was killed in World War I.