Eisler was born in Leipzig. He was initially self-taught in music, and after serving in the Hungarian army in World War I, worked as a proof-reader for the music publishers Universal Edition. From 1919 to 1923 he studied under Arnold Schoenberg in Vienna, and from 1925 taught music in Berlin.
Eisler joined the German Communist Party in 1926. He came to be critical of his early works written under Schoenberg, developing a simpler style with influences drawn from jazz. His work also became more political, reflecting his Marxist views. He wrote many songs and other works with texts by Bertolt Brecht (such as Die Massnahme (1930) and Die Mutter (1931)). Their largest-scale collaboration was the Deutsche Sinfonie (1935-57), a cantata against fascism.
In the early 1930s, Eisler's works were banned by the Nazi Party, and in 1933 he moved to the USA where he wrote and took classes on film music, working as musical assistant to Charlie Chaplin. He was nominated for Oscars for his scores to Hangmen Also Die and None but the Lonely Heart. In 1947 he wrote the book Composing for the Films.
In 1948 Eisler moved back to Europe, eventually returning to what was now East Germany after both he and Brecht were brought before the House Committee on Un-American Activities owing to their works in support of communism. Back in Europe, Eisler composed the East German national anthem, Auferstanden aus Ruinen, many cabaret-style songs and incidental music for the theatre, films and television, and organised workers' choruses. He died in East Berlin.