Kim was the son of a middle-class farmer, and he graduated from the Mokp'o Commercial High School at the top of his class in 1943. He began working as a clerk in a Japanese-owned shipping company and in 1945 took over the company, eventually becoming a wealthy businessman. During the Korean War he was captured by the communists and sentenced to be shot, but he managed to escape.

In the 1950s Kim became an ardent pro-democracy activist and in 1954 voiced opposition to the policies of President Syngman Rhee (Rhee, Syngman). After five attempts at elective office, Kim finally won a seat on the National Assembly in 1961, but the election was nullified following a military coup d'état led by Major General Park Chung Hee. By the age of 40 he had earned a reputation as one of South Korea's most gifted orators and charismatic politicians. He became increasingly critical of Park's policies, and in 1971, a year after becoming president of the National Democratic Party, Kim ran against Park in a national presidential election. Kim lost, despite winning more than 40 percent of the vote. He was by then an outspoken critic of the repressive policies of the Park government.

In 1973 Kim was kidnapped from his hotel in Tokyo by agents of the Korean Central Intelligence Agency and was returned forcibly to South Korea; this act severely strained relations between Japan and South Korea. In 1976 Kim was again arrested, having agitated for the restoration of democracy. He was released from house arrest in 1979 just two months after Park's assassination on October 26 of that year. Kim was arrested in May 1980 on charges of sedition and conspiracy and sentenced to death, but Park's successor, President Chun Doo Hwan, commuted the sentence to life imprisonment and later to 20 years. In December 1982 Kim was allowed to leave South Korea for medical treatment in the United States, but the trip became an exile. Able to return to South Korea in 1985, he resumed his role as one of the principal leaders of the political opposition. In 1987 he ran for the presidency and lost after splitting the antigovernment vote with rival opposition candidate Kim Young Sam. He ran again for the presidency in 1992 but was defeated by Kim Young Sam, who had merged his own Reunification Democratic Party with the ruling Democratic Justice Party to form the Democratic Liberal Party.