Kautsky was born in Prague; he studied history and philosophy in Vienna, and became a member of Austrian social democracy in 1875. From 1885 to 1890, he spent time in London, where he became a close friend of Friedrich Engels; in 1891, he co-authored the SPD's Erfurter Programm together with August Bebel and Eduard Bernstein.
Following the death of Friedrich Engels in 1895, Kautsky became one of the most important and influential theoreticians of socialism, forming the marxist centre of the party together with August Bebel. He broke with Rosa Luxemburg and the party's left wing in 1914 politically, and in 1922 re-joined the SPD after being a member of the USPD from 1917 to 1919.
Karl Kautsky lived in Berlin-Friedenau for many years; his wife, Luise Kautsky, was a close friend of Rosa Luxemburg, who also lived in Friedenau, and today there is a commemorative plaque where Kautsky lived at Saarstraße 14. He died in exile in Amsterdam at age 84.