Born and raised in Vienna, Lauda was the grandson of local industrialist Hans Lauda. He began racing despite his family’s disapproval, starting with a Mini before progressing to Formula Vee and privateer racing in the late 1960s. After his career stalled, Lauda took out a £30,000 bank loan and secured a place in European Formula Two with March Engineering in 1971. He debuted in Formula One with the team at the Austrian Grand Prix that year, earning a full-time seat in 1972 and winning the British Formula Two Championship.
Lauda moved to BRM for the 1973 season, scoring his maiden points finish in Belgium and earning a seat with Ferrari the following year alongside Clay Regazzoni. He 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.
While leading the 1976 championship, Lauda was seriously injured during the German Grand Prix at the Nürburgring, suffering severe burns and other life-changing injuries when his Ferrari 312T2 caught fire during a crash. He returned to racing six weeks later at the Italian Grand Prix, eventually losing the title to James Hunt by one point. Lauda remained at Ferrari in 1977, winning several races on the way to his second championship and clinching the title at the United States Grand Prix.
He 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. After a winless 1983 campaign, Lauda was partnered by Alain Prost the following season, where he beat Prost to his third title by a record half-point. With seven years between his second and third championships, Lauda holds the record for the longest period in the history of the sport between World Championship victories. Lauda retired after the 1985 season—taking his final victory at the Dutch Grand Prix—having achieved 25 race wins, 24 pole positions, 24 fastest laps, and 54 podiums in Formula One.
Outside of Formula One, Lauda won the Nürburgring 24 Hours in 1973 and the inaugural BMW M1 Procar Championship in 1979. In aviation, he founded and managed three airlines: Lauda Air, Niki, and Lauda. 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 wrote five books, including To Hell and Back (1986), an autobiography co-written with Herbert Völker. His 1976 rivalry with James Hunt was dramatized in the 2013 film Rush, where he was portrayed by Daniel Brühl. Regarding Hunt, Lauda said that the British driver was one of the very few he liked, one of a smaller number of people he respected, and the only person he had envied.
Lauda died on 20 May 2019, aged 70, in his sleep at the University Hospital of Zürich while undergoing kidney dialysis. He had experienced a period of ill health exacerbated by his lung injuries from the 1976 accident, and had received multiple kidney and lung transplants. At the 2019 Monaco Grand Prix, tributes were paid by current and former drivers and teams, with many wearing red caps in his honour.