The elder son of King John III Vasa of Sweden and Catherine, daughter of Sigismund I the Old of Poland, Sigismund belonged to the Vasa dynasty through his father and to the Jagiellon dynasty through his mother, who brought him up as a Catholic. He was elected king of Poland in August 1587, succeeding his uncle King Stephen Báthory. To obtain the throne he had to accept a reduction of royal power and a consequent increase of the power of the Sejm (Diet). In 1592 he married the Austrian archduchess Anna, and, after his father's death the same year, he received the Sejm's permission to accept the Swedish throne. He was crowned king of Sweden in 1594, but only after promising to uphold Swedish Lutheranism.

Leaving his paternal uncle Charles (later Charles IX) as regent in Sweden, Sigismund returned to Poland in July 1594. Charles, however, rose in rebellion, and, when Sigismund returned to Sweden with an army, Charles defeated him at Stångebro (1598) and deposed him in 1599. Sigismund's subsequent foreign policy was aimed at regaining the Swedish throne, and from 1600 Poland and Sweden were involved in an intermittent war. He also attempted to maintain an alliance with the Austrian Habsburgs. When his first Austrian wife died (1598) and he married her sister Constantia (1605), he provoked his opponents, already aroused by his efforts to introduce majority rule in place of unanimity in the Sejm, to engage in a civil war (1606–08).

Shortly after his victory over his internal enemies, Sigismund took advantage of a period of civil unrest in Muscovy (known as the Time of Troubles) and invaded Russia, holding Moscow for two years (1610–12) and Smolensk thereafter. In 1617 the Polish-Swedish conflict, which had been interrupted by an armistice in 1611, broke out again. While Sigismund's army was also fighting Ottoman forces in Moldavia (1617–21), King Gustavus II Adolphus (Gustav II Adolf) of Sweden (Charles IX's son) invaded Sigismund's lands, capturing Riga (1621) and seizing almost all of Polish Livonia. Sigismund, who concluded the Truce of Altmark with Sweden in 1629, never regained the Swedish crown. His Swedish wars resulted, moreover, in Poland's loss of Livonia and in a diminution of the kingdom's international prestige.