He fought in the German Army in World War I, and subsequently studied law at the University of Munich.
Unlike other SPD-members and Jews, Rheinstein was not dismissed from his position after the Nazi seizure of power, due to the fact that he had fought the Bavarian Soviet Republic in 1919.
In February 1933, he received a scholarship from the Rockefeller Foundation, and emigrated to the United States, where he began working at Columbia Law School.
After World War II, Rheinstein returned to Germany, where he was a member of the Legal Division of the Office of Military Government and served in a division of the Allied Control Council in Berlin.
In 1953, Rheinstein was awarded the Ordre des Palmes académiques and the Great Cross of Merit of the Federal Republic of Germany.