Ulbricht, a cabinetmaker by trade, joined the Social Democratic Party (Social Democratic Party of Germany) (SPD) in 1912 and during World War I served on the Eastern Front, deserting twice. After the war he entered the new Communist Party of Germany (KPD). A bureaucrat and organizer, he was elected to the party's central committee in 1923. With the rise of Joseph Stalin (Stalin, Joseph), Ulbricht became instrumental in Bolshevizing the German party and organizing it on a cell basis. He became a member of the Reichstag (parliament) in 1928 and led the Berlin party organization from 1929.

After the accession of Adolf Hitler (Hitler, Adolf) to power in Germany (January 1933), Ulbricht fled abroad, serving for the next five years as an agent of both the KPD and the Comintern in Paris and Moscow and in Spain during the Spanish Civil War (1936–39), all the time relentlessly persecuting Trotskyites and other deviationists. Back in Moscow at the start of Germany's invasion of the Soviet Union (1941), Ulbricht was assigned to propagandize German prisoners of war and process information from the German army.

Returning to Germany on April 30, 1945, Ulbricht helped reestablish the KPD and was charged with organizing an administration in the Soviet-occupied zone of Germany. He played a leading role in the merger of the KPD and the SPD into the Socialist Unity Party (SED; April 1946), which controlled East Germany until 1989.

On the formation of the German Democratic Republic (October 11, 1949), Ulbricht became deputy prime minister, adding the post of general secretary of the SED in 1950. When President Wilhelm Pieck died in 1960, the office of the presidency was abolished and a council of state instituted in its stead. Subsequently, Ulbricht became chairman of the council, thus formally taking supreme power. He crushed all opposition and became so powerful that he was able to block the de-Stalinization movement that swept eastern Europe after the death of the Soviet dictator. Only after the erection of the Berlin Wall in 1961 did the government finally begin to ease its strict control and permit a certain amount of economic liberalization and decentralization. East Germany became one of the most industrialized countries in eastern Europe, yet Ulbricht remained implacably opposed to the Federal Republic of Germany. Forced to retire as first secretary of the SED in May 1971 when the Soviet Union opened new relations with West Germany, he retained his position as head of state until his death.