Koessler, a cousin of Max Reger, was born in Waldeck, Fichtelgebirge (now part of Kemnath, Upper Palatinate).
He was taught the organ from 1874 to 1877 by Josef Rheinberger and attended the choir lessons of Franz Wüllner in Munich.
After his retirement in 1908, he returned to Germany, but became appointed to the agency of Kálmán and Dohnányi in order to ensure that he received a moderate income.
However, as a result of his erratic way of living, a large number of his compositions were lost, or found themselves only being played in private hands.
Koessler's chamber music has been highly praised by several commentators, including the eminent chamber music scholar Wilhelm Altmann, who has singled out Koessler's Second String Quartet and his Trio Suite for Piano, Violin and Viola for especial praise.