He was born in Cádiz. From the late 1890s he studied music in Madrid, studying piano with José Tragó and composition with Felipe Pedrell. It was from Pedrell that de Falla became interested in native Spanish music, particularly Andalusian flamenco (specifically canto jondo), the influence of which can be strongly felt in many of his works. Among his early pieces are a number of zarzuelas, but his first important work was the one-act opera La vida breve (Life is Short, written in 1905, though revised before its premiere in 1913).
He spent the years 1907 to 1914 in Paris, where he met a number of composers who had an influence on his style, including the impressionists Maurice Ravel, Claude Debussy and Paul Dukas. He wrote little more music, however, until his return to Madrid at the beginning of World War I. There he composed several of his best known pieces, including the suite for piano and orchestra Noches en los jardines de España (Nights in the Gardens of Spain, 1916) and the ballets El amor brujo (Love the Magician, 1915, which includes the much excerpted and arranged "Ritual Fire Dance") and El corregidor y la molinera (The Magistrate and the Miller's Wife) which, after revision, became El sombrero de tres picos (The Three-Cornered Hat, 1917, produced by Serge Diaghilev).
From 1921 to 1939 he lived in Granada, where he wrote the puppet opera El retablo de maese Pedro (1923) and a concerto for harpsichord and chamber ensemble (1926). In these works, the Spanish folk influence is somewhat less apparent than a kind of Stravinskian neo-classicism.
Also in Granada, he began work on the large-scale choral piece La Atlántida (Atlantis), based on a text by Jacinto Verdaguer, which he continued after moving to Argentina in 1939. The piece remained incomplete at his death (it was completed posthumously by Ernesto Halffter).
De Falla died in Alta Gracia in the Argentinian province of Córdoba.