His mother was a dressmaker, and Gianni was raised watching her work on designs in her boutique. After graduating from high school, Versace worked for a short time at his mother's shop before moving in 1972 to Milan, where he worked for several Italian ateliers, including Genny, Complice, Mario Valentino, and Callaghan. Backed by the Girombellis, an Italian fashion family, Versace established his own company, Gianni Versace SpA, in 1978 and staged his first ready-to-wear show under his own name that same year. His brother, Santo, served as CEO, and his sister, Donatella, was a designer and vice president.

Versace designed throughout the 1980s and '90s and built a fashion empire by producing ensembles that oozed sensuality and sexuality. His most famous designs included sophisticated bondage gear, polyvinyl chloride baby-doll dresses, and silver-mesh togas. Versace's detractors considered his flashy designs vulgar. Unfazed by such criticism, Versace staged his seasonal fashion shows like rock concerts at his lavish design headquarters in Milan, with groupies and paparazzi awaiting the arrival of both his celebrity friends, such as Elton John and Madonna, and his loyal models, such as Cindy Crawford, Linda Evangelista, Christy Turlington, and Naomi Campbell, who were paid such high salaries that the press dubbed them “supermodels.” Versace was credited with turning the fashion world into the high-powered, celebrity-besotted industry it remains to the present day.

As his success continued to grow, Versace began establishing boutiques throughout the United States with the help of his family. He also focused on publishing a series of coffee-table books that featured his sketches and photographs of his creations by esteemed photographers such as Richard Avedon (Avedon, Richard), who also worked on Versace's advertising campaigns. Versace's interest in the new and daring continued to flourish, and in 1989 he designed a line of haute couture for the first time. Also in 1989 he created costumes for the San Francisco Opera; a great enthusiast of the opera and ballet, Versace explored costume design as a side interest throughout his career. In 1993 Versace was diagnosed with a rare cancer of the inner ear. He battled this cancer successfully and then began to pass much of his business responsibilities onto his family.

On July 15, 1997, while returning to his Miami Beach home after a morning walk, Versace was shot and killed on his front steps, allegedly by the serial killer Andrew Cunanan. At the time of his death, many believed that the designer's 25-year career was at a peak; he had tempered his garish early work and begun to create increasingly refined yet colourful and sexy ensembles. His company had expanded to produce clothing for men, women, and children, as well as handbags, precious jewelry, perfume, and items for the home. Versace's work was honoured by a posthumous retrospective held from December 1997 to March 1998 at the Costume Institute of the Metropolitan Museum of Art in New York City. After his death, his sister took over as head designer for the Versace label.