Born into a middle-class family, Oberlin studied theology and graduated from the University of Strasbourg in 1758. He was a teacher until he became a pastor in 1767 at the Vosges village of Walderbach, which became the centre of his life's work.

Seeking to raise his parishioners' living standards, Oberlin provided village schools and thus began one of the first systems for supervising and instructing very young children while their parents were working. His teaching methods related instruction closely to practical needs and in many ways foreshadowed the work of the German educator Friedrich Froebel, the originator of the kindergarten. Oberlin's methods won him the respect of adults, who also came to him for instruction. Among them he found men to build roads and bridges to end the isolation of their region. To promote better crop production, he encouraged experiments in improving crops and started regular meetings for the exchange of agricultural information. He also made possible the purchase of modern farm implements, bought in bulk and sold at cost, and financed their purchase through a bank that he founded. After subsidizing young men to learn crafts in Strasbourg, he established factories for local industries.

Interdenominational in outlook, Oberlin welcomed Calvinists and Roman Catholics to his communion services. His admiration of the French philosopher Jean-Jacques Rousseau and the Swedish mystic Emanuel Swedenborg was reflected in his sermons, which combined rationalism with mysticism. His humanism was expressed in his enthusiastic welcome of the French Revolution, and he was honoured by both revolutionary and imperial governments of France. Oberlin's name was given to the town and college in Ohio, U.S., as well as to the Oberlinhaus, a German centre for treatment of the deaf, mute, and blind.