Bothe, who was born in Oranienburg, Germany, studied at the University of Berlin under Max Planck and received his PhD in 1914. For the next few years, he was a prisoner of war in Russia but, on his return to Germany in 1920, he started teaching at Berlin and worked in Hans Geiger's radioactivity laboratory.

He devised the ‘coincidence method’ of detecting the emission of electrons by x-rays in which electrons passing through two adjacent Geiger tubes at almost the same time are registered as a coincidental event. He used it to show that momentum and energy are conserved at the atomic level. In 1929 he applied the method to the study of cosmic rays and was able to show that they consisted of massive particles rather than photons. For this research he shared the 1954 Nobel Prize for physics with Max Born.

By 1930 his reputation was established and he was appointed professor of physics at Giessen. The same year he observed a strange radiation emitted from beryllium when it was exposed to alpha particles. This radiation was later identified by Chadwick as consisting of neutrons.

While director of the Max Planck Institute in Heidelberg, Bothe supervised the construction of Germany's first cyclotron. This work was finished in 1943 and during World War II he led German scientists in their search for atomic energy. When the war ended he was given the chair of physics at Heidelberg, which he retained until his death.