Ivan Andrić was born on 9 October 1892, to Bosnian Croat parents in Travnik, in the Condominium of Bosnia and Herzegovina. He was born as Ivan, but became known by the diminutive Ivo. When Andrić was two years old, his father Antun died. Because his mother Katarina was too poor to support him, he was raised by his mother's family in the town of Višegrad on the river Drina in eastern Bosnia, where he saw the 16th-century Mehmed Paša Sokolović Bridge, later made famous in his novel The Bridge on the Drina (Na Drini ćuprija).

Andrić attended the Jesuit gymnasium in Travnik, followed by Sarajevo's gymnasium and later he studied philosophy at the Universities of Zagreb (1912 and 1918), Vienna (1913), Kraków (1914), and Graz (PhD, 1924). Because of his political activities, Andrić was imprisoned by the Austrian government during World War I (first in Maribor and later in the Doboj detention camp) alongside other pro-Yugoslav civilians.

Andric started his literary career as a poet. In 1914 he was one of the contributors to Hrvatska mlada lirika (Young Croatian Lyrics)

Under the newly formed Kingdom of Serbs, Croats, and Slovenes (later Kingdom of Yugoslavia) Andrić became a civil servant, first in the Ministry of Faiths and then the Ministry of Foreign Affairs, where he pursued a successful diplomatic career reaching as high as Deputy Foreign Minister.

During his diplomatic service, he worked in embassy at Holy See (1920), consulates in Bucharest, Trieste and Graz (1924), consulates in Paris and Marseilles (1927), and embassy in Madrid (1928). In 1939 he was appointed ambassador in Germany. He was also a delegate of the Kingdom of Yugoslavia at the 19th, 21st, 23rd and 24th sessions of the League of Nations in Geneva in the period 1930–1934.[9] Andrić greatly opposed the movement of Stjepan Radić, the president of the Croatian Peasant Party. His ambassadorship ended in 1941 after the German invasion of Yugoslavia. During World War II, Andrić lived quietly in Belgrade, completing three of his most famous novels which were published in 1945, including The Bridge on the Drina.

After the war, Andrić spent most of his time in his home in Belgrade and held a number of ceremonial posts in the new Communist government of Yugoslavia, and was also a member of the Parliament of Bosnia and Herzegovina. In 1961, he was awarded the Nobel Prize for Literature "for the epic force with which he has traced themes and depicted human destinies drawn from the history of his country". He donated all of the prize money for the improvement of libraries in Bosnia and Herzegovina. He was member of the Serbian Academy of Sciences and Arts.

Following the death of his second wife, Milica Babić-Andrić, in 1968, he began reducing his public activities. In 1969 he was elected an honorary member of the Academy of Sciences and Arts of Bosnia and Herzegovina and in 1972 the University of Belgrade awarded him an honorary doctorate. As time went by, he grew increasingly ill and eventually died on 13 March 1975, in Belgrade, SR Serbia, SFR Yugoslavia.

He was buried in the Belgrade New Cemetery, in the Alley of Distinguished Citizens.