Born in Schwechat, Lower Austria, Klima started working for the OMV oil company in 1969 and remained with the company up to the beginning of his political career in 1992, in his later years serving as a member of their management board. Although Klima was then unknown to the majority of Austrians, in 1992 Federal Chancellor Franz Vranitzky made him Minister of Economy, a position Klima held till 1996, when he became Minister of Finance for a year.
In 1997, upon Vranitzky's resignation, Klima was sworn in as Federal Chancellor of Austria, having renewed the grand coalition between his own party (SPÖ) and the Austrian People's Party (ÖVP), with Wolfgang Schüssel serving as his Vice-Chancellor.
Probably influenced by other European leaders such as Tony Blair, under Klima's premiership the Austrian Social Democrats altogether renounced their allegiance to Marxism and thus to their own political roots and very clearly continued their move from the political left towards the centre. For example, further privatisations took place, and several public services that had been subsumed under the policies of the welfare state were tentatively reduced. As a consequence, a high percentage of the party's traditional working class clientèle, dissatisfied with Klima and his party, left to support Jörg Haider's right-wing Freedom Party. However, just as his predecessor Vranitzky, Klima repeatedly and publicly announced that under no circumstances was he prepared to enter into a coalition with Haider's party.
Viktor Klima stepped down in February 2000 and was succeeded by Schüssel, who did dare to form a coalition government with the Freedom Party. In a heartrending televised speech held on the day he left office, Klima urged his former staff to "take good care of our Austria", insinuating that the new government would be less democratic and more authoritarian. A few weeks later he took up a senior management position with Volkswagen in Argentina. He at the same time gave up his post as party chairman of the SPÖ, which he had also held since 1997, and was succeeded in this capacity by Alfred Gusenbauer, the new leader of the opposition.
Klima has been married twice. He has a grown-up son by his first marriage. His second wife, from whom he is separated, is primary school teacher-turned-socialite Sonja Klima. Klima used to be a heavy smoker and was probably one of the last politicians who smoked in public. During his premiership he was even hospitalized due to a nicotine-related illness.