Grabbe studied law in Leipzig (1820–22) and made unsuccessful attempts at acting and directing in Berlin. After quarrelling with the poet Heinrich Heine and members of Young Germany (a politically radical literary movement) and failing in attempts to get help from the Romantic writer Ludwig Tieck, he became a solicitor and then a military justiciary in Detmold. He was unhappily married in 1833 and was fired from his job in 1834 for negligence. After several months of poverty in Frankfurt, he went to Düsseldorf, where he lived as a freelance writer with the help of Karl Leberecht Immermann, with whom he later quarrelled also. Although he had been successful in finding publishers for his plays, his dissipated life led to an early death from alcoholism and tuberculosis.

Grabbe's most important poetic work, Napoleon; oder, die hundert Tage (1831; “Napoleon; or, The Hundred Days”), exemplifies the boldly experimental form of his plays, in which he avoided continuous action by the use of a series of vividly depicted and contrasting scenes. His tragedy Don Juan und Faust (1829) is an imaginative and daring attempt to combine the two great works of Mozart and Goethe. Like many of his plays, it exceeded the practical demands of the theatre. Among his most enduring is the mordant satire Scherz, Satire, Ironie, und tiefere Bedeutung (1827; Comedy, Satire, Irony, and Deeper Meaning). He is also known for Abhandlung über die Shakespearo-Manie (1827; “Essay on Shakespeare Mania”), in which he attacks Shakespeare and advocates an independent national drama. His other major works are the tragedy Herzog Theodor von Gothland (1827; “Duke Theodor of Gothland”), noted for its scenes of violence; and two plays about Hohenstaufen rulers, Kaiser Friedrich Barbarossa (1829) and Kaiser Heinrich VI (1830).