Little is known of Khomeini's early life. There are various dates given for his birth, the most common being May 17, 1900, and September 24, 1902. He was the grandson and son of mullahs, or Shīʿite religious leaders. When he was five months old, his father was killed on the orders of a local landlord. The young Khomeini was raised by his mother and aunt and then by his older brother. He was educated in various Islamic schools, and he settled in the city of Qom about 1922. About 1930 he adopted the name of his home town, Khomayn (also spelled Khomeyn or Khomen), as his surname. As a Shīʿite scholar and teacher, Khomeini produced numerous writings on Islamic philosophy, law, and ethics, but it was his outspoken opposition to Iran's ruler, Mohammad Reza Shah Pahlavi, his denunciations of Western influences, and his uncompromising advocacy of Islamic purity that won him his initial following in Iran. In the 1950s he was acclaimed as an ayatollah, or major religious leader, and by the early 1960s he had received the title of grand ayatollah, thereby making him one of the supreme religious leaders of the Shīʿite community in Iran.

In 1962–63 Khomeini spoke out against the shah's reduction of religious estates in a land-reform program and against the emancipation of women. His ensuing arrest sparked antigovernment riots, and, after a year's imprisonment, Khomeini was forcibly exiled from Iran on November 4, 1964. He eventually settled in the Shīʿite holy city of Al-Najaf, Iraq, from where he continued to call for the shah's overthrow and the establishment of an Islamic republic in Iran.

From the mid-1970s Khomeini's influence inside Iran grew dramatically owing to mounting public dissatisfaction with the shah's regime. Iraq's ruler, Ṣaddām Ḥussein, forced Khomeini to leave Iraq on October 6, 1978. Khomeini then settled in Neauphle-le-Château, a suburb of Paris. From there his supporters relayed his tape-recorded messages to an increasingly aroused Iranian populace, and massive demonstrations, strikes, and civil unrest in late 1978 forced the departure of the shah from the country on January 16, 1979. Khomeini arrived in Tehrān in triumph on February 1, 1979, and was acclaimed as the religious leader of Iran's revolution. He appointed a government four days later and on March 1 again took up residence in Qom. In December a referendum on a new constitution created an Islamic republic in Iran, with Khomeini named Iran's political and religious leader for life.

Khomeini himself proved unwavering in his determination to transform Iran into a theocratically ruled Islamic state. Iran's Shīʿite clerics largely took over the formulation of governmental policy, while Khomeini arbitrated between the various revolutionary factions and made final decisions on important matters requiring his personal authority. First his regime took political vengeance, with hundreds of people who had worked for the shah's regime reportedly executed. The remaining domestic opposition was then suppressed, its members being systematically imprisoned or killed. Iranian women were required to wear the veil, Western music and alcohol were banned, and the punishments prescribed by Islamic law were reinstated.

The main thrust of Khomeini's foreign policy was the complete abandonment of the shah's pro-Western orientation and the adoption of an attitude of unrelenting hostility toward both superpowers. In addition, Iran tried to export its brand of Islamic revivalism to neighbouring Muslim countries. Khomeini sanctioned Iranian militants' seizure of the U.S. embassy in Tehrān (November 4, 1979) and their holding of American diplomatic personnel as hostages (Iran hostage crisis) for more than a year. He also refused to countenance a peaceful solution to the Iran-Iraq War, which had begun in 1980 and which he insisted on prolonging in the hope of overthrowing Ṣaddām. Khomeini finally approved a cease-fire in 1988 that effectively ended the war.

Iran's course of economic development foundered under Khomeini's rule, and his pursuit of victory in the Iran-Iraq War ultimately proved futile. Khomeini, however, was able to retain his charismatic hold over Iran's Shī'ite masses, and he remained the supreme political and religious arbiter in the country until his death. His gold-domed tomb in Tehrān's Behesht-e Zahrāʾ cemetery has since become a shrine for his supporters. Ideologically, he is best remembered for having developed the concept of vilāyat-e faqīh (“guardianship of the jurist”) in a series of lectures and tracts first promulgated during exile in Iraq in the late 1960s and '70s. Khomeini argued therein for the establishment of a theocratic government administered by Islamic jurists in place of corrupt secular regimes. The Iranian constitution of 1979 embodies articles upholding this concept of juristic authority.