He was born at Weimar. After attending school there, he went in his sixteenth year to the University of Jena, and afterwards studied for a year in Duisburg. In 1780 he completed his legal course and became an advocate. Through the influence of Graf Gortz, Prussian ambassador at the Russian court, he became secretary of the governor-general of St Petersburg, In 1783 he received the appointment of assessor to the high court of appeal in Reval, where he married the daughter of a Russian lieutenant-general. He was ennobled in 1785, and became president of the magistracy of the province of Estonia. In Reval he acquired considerable reputation by his novels, Die Leiden der Ortenbergischen Familie (1785) and Geschichte meines Vaters (1788), and still more by the plays Adelkeid von Wulfingen (1789), Menschenhass und Reue (1790) and Die Indianer in England (1790). The good impression produced by these works was, however, almost effaced by a cynical dramatic satire, Doktor Bahrdt mit den eisernen Stirn, which appeared in 1790 with the name of Knigge on the title page. After the death of his first wife, Kotzebue retired from the Russian service, and lived for a time in Paris and Mainz; he then settled in 1795 on an estate which he had acquired near Reval and devoted himself to writing.
Within a few years he published six volumes of miscellaneous sketches and stories (Die jüngsten Kinder meiner Laune, 1793-1796) and more than twenty plays, the majority of which were translated into several European languages. In 1798 he accepted the office of dramatist to the court theatre in Vienna, but owing to differences with the actors he was soon obliged to resign. He now returned to his native town, but as he was not on good terms with Goethe, and had openly attacked Romanticism, his position in Weimar was not comfortable. He thought of returning to St Petersburg, but on his journey there he was, for some unknown reason, arrested at the frontier and transported to Siberia. Fortunately he had written a comedy which flattered the vanity of the emperor Paul of Russia; he was quickly brought back, presented with an estate from the crown lands of Livonia, and made director of the German theatre in St Petersburg.
He returned to Germany when the emperor Paul died, and again settled in Weimar; he found it as impossible as ever to gain a footing in literary society, and turned to Berlin, where in association with Garlieb Merkel (1769-1850) he edited Der Freimutige (1803-1807) and began his Almanach dramatischer Spiele (1803-1820). Towards the end of 1806 he was once more in Russia, and in the security of his estate in Esthnia wrote many satirical articles against Napoleon Bonaparte in his journals Die Biene and Die Grille. As councillor of state he was attached in 1816 to the department for foreign affairs in St Petersburg, and in 1817 went to Germany as a kind of spy in the service of Russia, with a salary of 15,000 roubles. In a weekly journal (Literarisches Wochenbl alt) which he published in Weimar he scoffed at the pretensions of those Germans who demanded free institutions, and became an object of such general dislike that he was obliged to move to Mannheim. He was especially detested by the young enthusiasts for liberty, and one of them, Karl Ludwig Sand, a theological student, stabbed him, in Mannheim. Sand was executed, and the government made his crime an excuse for placing the universities under strict supervision.
Besides his plays, Kotzebue wrote several historical works, which, however, are too one-sided and prejudiced to have much value. Of more interest are his autobiographical writings, Meine Flucht nach Paris im Winter 1790 (1791), Uber meinen Aufenthalt in Wien (1799), Das merkwürdigste Jahr meines Lebens (1801), Erinnerungen aus Paris (1804), and Erinnerungen von meiner Reise aus Liefland nach Rom und Neapel (1805). As a dramatist he was extraordinarily prolific, his plays numbering over 200; his popularity, not merely on the German, but on the European stage, was unprecedented. His success, however, was due less to any conspicuous literary or poetic ability than to an extraordinary facility in the invention of effective situations; he possessed, as few German playwrights before or since, the unerring instinct for the theatre; and his influence on the technique of the modern drama from Scribe to Sardou and from Bauernfeld to Sudermann is unmistakable. Kotzebue is to be seen to best advantage in his comedies, such as Der Wildfang, Die beiden Klingsberg and Die deutschen Kleinstädter, which contain admirable genre pictures of German life. These plays held the stage in Germany long after the once famous Menschenhass und Reue (known in England as The Stranger), Graf Benjowsky, or ambitious exotic tragedies like Die Sonnenjungfrau and Die Spanier in Peru (which Sheridan adapted as Pizarro) were forgotten.
Two collections of Kotzebue's dramas were published during his lifetime: Schauspiele (5 vols., 1797); Neue Schauspiele (23 vols., 1798-1820). His Sämtliche dramatische Werke appeared in 44 vols., in 1827-1829, and again, under the title Theater, in 40 vols., in 1840-1841. A selection of his plays in 10 vols. appeared at Leipzig in 1867-1868. Cp. H. Doring, A. von Kotzebues Leben (1830); W. von Kotzebue, A. von Kotzebue (1881); Ch. Rabany, Kotzebue, sa vie et son temps (1893); W Sellier, Kotzebue in England (1901).