Reuther was born on September 1, 1907 in Wheeling, West Virginia to a family that had emigrated from Germany. He joined the Ford Motor Company in 1927 as a tool and die maker, but was laid off in 1932. According to Reuther, he was fired for his socialist activities. He and his brother Victor went to Europe and then worked in an auto plant at Gorky in the Soviet Union, which was being built with the cooperation of Henry Ford. He returned to the United States where he found employment at General Motors and became an active member of the United Automobile Workers (UAW). He was a member of the Socialist Party and attended a Communist Party planning meeting in February 1939, working with the Communists in some union activities. He remained active in the Socialist Party. By this time he became impressed with the accomplishments of President Franklin D. Roosevelt and joined the Democratic Party. By this time he had been elected president of United Automobile Workers Local 174 in 1936.
Reuther led several strikes and in 1937 and 1940 was hospitalized after being badly beaten by strikebreakers. He survived two assassination attempts, and his right hand was permanently crippled in an attack on April 20, 1948. By this time, UAW membership had increased tremendously and Local 174 was a powerful local in the UAW. As a senior union organizer, Reuther helped win major strikes for union recognition against General Motors in 1940 and Ford in 1941.
After the bombing of Pearl Harbor, Reuther supported the war effort and insured that there were no strikes that might disrupt munitions production. He was appointed to the War Manpower Commission, the Office of Production Management, and the War Production Board. After the war, he led a 113-day strike against General Motors in 1945 and into 1946, but he failed to achieve his goal of being able to inspect company books. However he did win increases in wages and benefits.
In April 194, Reuther was hit by a shotgun blast through his kitchen window. He happened to turn towards his wife, and was hit in the arm instead of the chest and heart. No arrest was ever made in the matter.
In 1946 Reuther narrowly defeated R. J. Thomas for the UAW presidency. He purged the UAW of all communist influence. He was active in the Congress of Industrial Organizations (CIO) and led the expulsion of 11 communist-led unions from the organization in 1949. In 1947 he founded the Americans for Democratic Action, an anti-communist organization with leftist goals. He became president of the CIO in 1952, and negotiated a merger with the American Federation of Labor immediately after, which took effect in 1955.
Reuther was a strong supporter of the Civil Rights Movement. He contributed union organizers and finances to the movement, as well as his own personal involvement. Reuther participated in both the March on Washington for Freedom and Jobs in August of 1963, and the march from Selma to Montgomery in March of 1965. Reuther stood along side Martin Luther King Jr. when King made his famous "I Have A Dream" speech, during the 1963 March on Washington.
Reuther was conflicted over the issue of the Vietnam War. He supported Lyndon Johnson and also supported Hubert Humphrey in 1968. He met weekly with President Johnson during 1964–65. But he was opposed to the war. He mobilized UAW resources to minimize the threat that George Wallace would win a sizeable segment of union votes in 1968. Barry Goldwater called Reuther a "more dangerous menace than the Sputnik or anything Soviet Russia might do to America."
In January 1964, two months after taking office, President Lyndon Johnson imposed a 25 percent tax on potato starch, dextrin, brandy, and light trucks. The tax targeted items imported from Europe and was imposed in retaliation for lost American chicken sales to Europe. Johnson attempted to persuade Reuther not to initiate a strike just prior to the 1964 election and get his support Johnson's civil rights platform. In exchange, Reuther wanted Johnson to take measures to respond to Volkswagen's increased shipments to the United States to prevent Americans from buying the foreign-built cars.
The chicken tax helped to decrease the importation of German-built Volkswagen Type 2 vans. That year the U.S. imports of "automobile trucks" from West Germany declined to a value of $5.7 million—about one-third the value imported in the previous year.
On May 9, 1970, Walter Reuther, his wife May, architect Oscar Stonorov, Reuther's bodyguard William Wolfman, and their pilot and co-pilot, were all killed when their chartered Gates Learjet 23 crashed. The plane was arriving from Detroit in rain and fog, and crashed on its final approach to Pellston Regional Airport in Pellston, Michigan, near the union's recreational and educational facility at Black Lake, Michigan. It was later discovered that the plane's altimeter was missing parts, and that some incorrect parts were installed, and one of its parts had been installed upside down. Some believe that Reuther may have been murdered.