Foscolo, born of a Greek mother and a Venetian father, was educated at Spalato (now Split, Croatia) and Padua, in Italy, and moved with his family to Venice about 1793. There he moved in literary circles. In 1797 the performance of his tragedy Tieste (“Thyestes”) made him famous.

Foscolo's early enthusiasm for Napoleon, proclaimed in his ode A Bonaparte liberatore (1797; “To Bonaparte the Liberator”), quickly turned to disillusionment when Napoleon ceded Venetia to Austria in the Treaty of Campo Formio (1797). Foscolo's very popular novel Ultime lettere di Jacopo Ortis (1802; The Last Letters of Jacopo Ortis, 1970) contains a bitter denunciation of that transaction and shows the author's disgust with Italy's social and political situation. Some critics consider this story the first modern Italian novel.

When the Austrians and Russians invaded Italy in 1799, Foscolo, with other Italian patriots, joined the French side. Made a captain in the Italian division of the French army after the defense of Genoa in 1800, he had commissions in Milan, Bologna, and Florence, where he found time to involve himself in many love affairs.

Finally Foscolo was sent to serve in France (1804–06). During that period he translated some classical works and Laurence Sterne's Sentimental Journey into Italian and wrote odes and sonnets.

In 1807 Foscolo returned to Milan and established his literary reputation with “Dei sepolcri” (Eng. trans., “Of the Sepulchres,” c. 1820), a patriotic poem in blank verse, written as a protest against Napoleon's decree forbidding tomb inscriptions. In 1808 the poem won for its author the chair of Italian rhetoric at the University of Pavia. When the chair was abolished by Napoleon the next year, Foscolo moved on to Milan. The satirical references to Napoleon in his tragedy Aiace (first performed 1811; “Ajax”) again brought suspicion on him; in 1812 he moved to Florence, where he wrote another tragedy, Ricciarda, and most of his highly acclaimed unfinished poem, Le grazie (published in fragments 1803 and 1818, in full 1822; “The Graces”). In 1813 Foscolo returned to Milan.

Napoleon fell the following year, the Austrians returned to Italy, and Foscolo, refusing to take the oath of allegiance, fled first to Switzerland and then in 1816 to England. Popular for a time in English society because he was an Italian patriot, Foscolo supported himself by teaching and writing commentaries on Dante, Boccaccio, and Petrarch for The Edinburgh Review and The Quarterly Review. He died in poverty. In 1871, with great national ceremony, his remains were moved from England and interred in the church of Santa Croce, in Florence.