Born in Hirschberg on the Saale in the Principality of Reuss-Gera, Germany, Mutschmann moved while he was young with his family to Plauen in Saxony.

[1] During World War I, he volunteered for service with Reserve Infantry Regiment 133 and served on the Western Front until he was severely wounded in April 1916.

He was awarded the Iron Cross, 2nd class, was discharged from the Imperial German Army as unfit for field service on 24 December 1916 and resumed the direction of his factory in Plauen.

During the period when the NSDAP was banned in the wake of the failed Beer Hall Putsch, Mutschmann succeeded Fritz Tittmann as the leader in Saxony of the National Socialist Freedom Movement (NSFB), a Nazi front organization, taking over at the NSFB party congress, 16–17 August 1924.

[1] After the NSDAP was re-established in 1925, Mutschmann was appointed Landesleiter (later Gauleiter) of Saxony on 27 March 1925, maintaining that position until the fall of the Nazi regime.

On 28 February 1935, he also became the Minister-President of Saxony, displacing his rival, Manfred Freiherr von Killinger, who was purged in 1934 in the aftermath of the Night of the Long Knives.

On 1 May in Dresden, he insisted that the city go into public mourning after the suicide of German dictator Adolf Hitler on 30 April 1945.

Handed over to the NKVD, he was imprisoned in the Lubyanka prison in Moscow, tried by the Military Collegium of the Supreme Court of the Soviet Union and sentenced to death on 30 January 1947.