Tropsch was born in Plan bei Marienbad, Sudet-German Bohemia at that time part of Austria-Hungary now Czech Republic.

Tropsch worked in a dye factory in Mülheim in 1916–1917, then for a few months at the Kaiser Wilhelm Institute for Coal Research.

From 1917 to 1920, Tropsch worked in a tar distillery of the Rütgers company in Niederau, but returned to the Kaiser Wilhelm Institute for Coal Research in 1920, staying until 1928.

He later accepted a position in the United States at the Laboratories of Universal Oil Products and the Armour Institute of Technology in Chicago in 1931.

Due to a severe illness Tropsch returned to Germany in 1935, where he died shortly after his arrival, in a hospital in Essen.