Lauda was born on 22 February 1949 in Vienna, Austria, to a wealthy paper manufacturing family. His paternal grandfather was the Viennese-born industrialist Hans Lauda. Lauda became a racing driver despite his family's disapproval. After starting out with a Mini, Lauda moved on into Formula Vee, as was normal in Central Europe, but rapidly moved up to drive in private Porsche and Chevron sports cars. With his career stalled, he took out a £30,000 bank loan, secured by a life insurance policy, to buy his way into the fledgling March team as a Formula Two driver in 1971.
Lauda was quickly promoted to the Formula One team, but drove for March in Formula One and Formula Two in 1972. Although the latter cars were good and Lauda's driving skills impressed March principal Robin Herd, March's 1972 Formula One season was catastrophic. Lauda took out another bank loan to buy his way into the BRM team in 1973. Lauda was instantly quick, but the team was in decline; although the BRM P160E was fast and easy to drive it was not reliable and its engine lacked power. Lauda's popularity was on the rise after he was running third at the Monaco Grand Prix that year before a gearbox failure ended his race prematurely, resulting in Enzo Ferrari becoming interested.
When his BRM teammate Clay Regazzoni left to rejoin Ferrari in 1974, team owner Enzo Ferrari asked him what he thought of Lauda. Regazzoni spoke so favorably of Lauda that Ferrari promptly signed him, paying him enough to clear his debts. Lauda took his maiden podium in his debut for Ferrari, and his maiden victory three races later at the Spanish Grand Prix. After winning five Grands Prix in his 1975 campaign, Lauda won his first title, becoming the first Ferrari-powered World Drivers' Champion in 11 years. Lauda then left Ferrari and signed with Brabham in 1978, achieving podiums in every race he finished that season, with victories in Sweden and Italy. Amid a winless 1979 season for Brabham, Lauda left the team after the Italian Grand Prix, and took a two-year hiatus from racing. He returned with McLaren in 1982, winning multiple races. Lauda won a third world championship in 1984 by half a point over teammate Alain Prost.
Lauda was inducted into the International Motorsports Hall of Fame in 1993. He returned to Formula One in an advisory role at Ferrari in 1993, and was the team principal of Jaguar from 2001 to 2002. From 2012 until his death, Lauda was the non-executive chairman and co-owner of Mercedes, winning six consecutive World Constructors' Championships with the team from 2014 to 2019. Lauda died on 20 May 2019 in his sleep aged 70 at the University Hospital of Zürich where he had been undergoing kidney dialysis.