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Kálmán initially intended to become a concert pianist, but because of early-onset arthritis, he focused on composition instead. He studied music theory and composition at the National Hungarian Royal Academy of Music (then the Budapest Academy of Music), where he was a fellow student of Béla Bartók and Zoltán Kodály under Hans Kössler. His early symphonic poems Saturnalia and Endre es Johanna were well-received, although he failed to achieve publication. He also composed piano music and wrote many songs: a song cycle on poems by Ludwig Jacobowski and a song collection published under the title Dalai.
However, the popularity of his humorous cabaret songs led him towards the composition of operettas. His first great success was Tatárjárás – Ein Herbstmanöver in German, meaning Autumn maneuver, although the English title is The Gay Hussars, which was first staged at the Lustspieltheater in Budapest, on 22 February 1908. Thereafter he moved to Vienna where he achieved worldwide fame through his operettas Der Zigeunerprimas, Die Csárdásfürstin, Gräfin Mariza, and Die Zirkusprinzessin.
Kálmán and Franz Lehár were the leading composers of what has been called the "Silver Age" of Viennese operetta during the first quarter of the 20th century. He became well known for his fusion of Viennese waltz with Hungarian csárdás. Even so, polyphonically and melodically, Kálmán was a devoted follower of Giacomo Puccini, while in his orchestration methods he employed principles characteristic of Tchaikovsky's music.
Despite his Jewish origins he was one of Adolf Hitler's favorite composers. After the Anschluss, he rejected Hitler's offer to become an 'honorary Aryan' and was forced to move first to Paris, then to the United States, settling in California in 1940. Following his emigration, performances of his works were prohibited in Nazi Germany. He emigrated back to Vienna from New York in 1949 before moving in 1951 to Paris, where he died.