Naegeli, the son of a physician from Kilchberg in Switzerland, began medical studies at Zurich but went on to study botany under Alphonse de Candolle at Geneva. After graduating in 1840 he studied philosophy in Berlin but resumed his botanical studies in 1842, when he left for Jena to work with Matthias Schleiden.

In 1842 Naegeli published an essay on pollen formation in which he accurately described cell division, realizing that the wall formed between two daughter cells is not the cause but the result of cell division. He noted the division of the nucleus and recorded the chromosomes as ‘transitory cytoblasts’. By 1846 these investigations had convinced him that Schleiden's theory of cells budding off the nuclear surface was incorrect.

Naegeli discovered the antherozoids (male gametes) in ferns and archegonia (female sex organs) in Ricciocarpus but did not realize the analogy of these to the pollen and ovary of seed plants. In 1845 he began investigating apical growth, which led to his distinguishing between formative (meristematic) and structural tissues in plants. Naegeli's micellar theory, formulated from studies on starch grains, gave information on cell ultrastructure.

In the taxonomic field, Naegeli made a thorough study of the genus Hieracium (hawkweeds), investigating crosses in the group. He had strong views on evolution and inheritance, which led him to reject Mendel's important work on heredity and hybrid ratios.