Karl was the second son of Friedrich Anton Ulrich, Prince of Waldeck and Pyrmont and Countess Palatine Louise of Zweibrücken-Birkenfeld, youngest child of Christian II, Count Palatine of Zweibrücken-Birkenfeld.

In 1728 his father and his elder brother Christian Philip died, and so he became Prince of Waldeck and Pyrmont.

Prince Georg Friedrich of Waldeck had already led the Dutch army in the War of the Grand Alliance.

In the War of Austrian Succession, Karl was appointed as commander of the Dutch Army by the States-General of the Netherlands, as counterbalance to William IV, Prince of Orange, who relied completely on his brother-in-law the Duke of Cumberland.

In Zweibrücken, on 19 August 1741, Karl August married his first cousin Countess Palatine Christiane Henriette of Zweibrücken-Birkenfeld (1725–1816), daughter of Christian III, Count Palatine of Zweibrücken.