Amichai was born in Würzburg, Germany, to an Orthodox Jewish family, and was raised speaking both Hebrew and German. According to literary scholar Nili Scharf Gold, a childhood trauma in Germany had an impact on his later poetry: he had an argument with a childhood friend of his, Ruth Hanover, that caused her to bicycle home angrily; she fell and as a result had to get her leg amputated. Several years later, she was unable to join the rest of her family, who fled the Nazi takeover, due to her missing leg, and ended up being killed in the Holocaust. Amichai occasionally referred to her in his poems as "Little Ruth".
Amichai immigrated with his family at the age of 12 to Petah Tikva in Mandate Palestine in 1935, moving to Jerusalem in 1936. He first worked as a physical education teacher. He was a member of the Palmach, the strike force of the Haganah, the defence force of the Jewish community in pre-state Israel. As a young man he fought in World War II as a member of the British Army Jewish Brigade, and in the Negev on the southern front in the Israeli War of Independence.
Amichai traced his beginnings as a writer to when he was stationed with the British army in Egypt. There he happened to find an anthology of modern British poetry, and the works of Dylan Thomas, T. S. Eliot, and W. H. Auden included in that book inspired his first serious thoughts about becoming a writer.
Amichai began writing poetry in 1946, at age 22. He also changed his name to Yehuda Amichai around that same time. According to Nili Scharf Gold, the idea for the name change, as well as the specific last name "Amichai", came from his girlfriend at the time, whom he has called "Ruth Z.", and who soon afterward broke up with him and moved to the United States. According to Gold, Amichai later claimed that he only started writing poetry in 1948, partly as a way of hiding from the public record this portion of his life.
Following the War of Independence, Amichai studied Bible and Hebrew literature at the Hebrew University of Jerusalem. Encouraged by one of his professors at Hebrew University, he published his first book of poetry, "Now and in Other Days," in 1955. Later, he was poet in residence at numerous universities, including Berkeley, NYU, and Yale.
In 1956, Amichai served in the Sinai War, and in 1973 he served in the Yom Kippur War. He later became an advocate of peace and reconciliation in the region, working with Arab writers.
He died of cancer in 2000, at age 76.