Hilbert adopted and warmly defended Georg Cantor's set theory and transfinite numbers. A famous example of his leadership in mathematics is his 1900 presentation of a collection of problems that set the course for much of the mathematical research of the 20th century.

Hilbert and his students contributed significantly to establishing rigor and some tools to the mathematics used in modern physics. He is also known as one of the founders of proof theory, mathematical logic and the distinction between mathematics and metamathematics.

Hilbert, the first of two children and only son of Otto and Maria Therese (Erdtmann) Hilbert, was born in the Province of Prussia - either in Königsberg (according to Hilbert's own statement) or in Wehlau (known since 1946 as Znamensk) near Königsberg where his father worked at the time of his birth. In the fall of 1872, he entered the Friedrichskolleg Gymnasium (Collegium fridericianum, the same school that Immanuel Kant had attended 140 years before), but after an unhappy duration he transferred (fall 1879) to and graduated from (spring 1880) the more science-oriented Wilhelm Gymnasium. Upon graduation he enrolled (autumn 1880) at the University of Königsberg, the "Albertina". In the spring of 1882, Hermann Minkowski (two years younger than Hilbert and also a native of Königsberg but so talented he had graduated early from his gymnasium and gone to Berlin for three semesters), returned to Königsberg and entered the university. "Hilbert knew his luck when he saw it. In spite of his father's disapproval, he soon became friends with the shy, gifted Minkowski." In 1884, Adolf Hurwitz arrived from Göttingen as an Extraordinarius, i.e., an associate professor. An intense and fruitful scientific exchange between the three began and especially Minkowski and Hilbert would exercise a reciprocal influence over each other at various times in their scientific careers. Hilbert obtained his doctorate in 1885, with a dissertation, written under Ferdinand von Lindemann, titled Über invariante Eigenschaften spezieller binärer Formen, insbesondere der Kugelfunktionen ("On the invariant properties of special binary forms, in particular the spherical harmonic functions").

Hilbert remained at the University of Königsberg as a professor from 1886 to 1895. In 1892, Hilbert married Käthe Jerosch (1864–1945), "the daughter of a Konigsberg merchant, an outspoken young lady with an independence of mind that matched his own". While at Königsberg they had their one child Franz Hilbert (1893–1969). In 1895, as a result of intervention on his behalf by Felix Klein he obtained the position of Chairman of Mathematics at the University of Göttingen, at that time the best research center for mathematics in the world and where he remained for the rest of his life.

His son Franz would suffer his entire life from an (undiagnosed) mental illness, his inferior intellect a terrible disappointment to his father and this tragedy a matter of distress to the mathematicians and students at Göttingen. Sadly, Minkowski — Hilbert's "best and truest friend" — would die prematurely of a ruptured appendix in 1909.

Among the students of Hilbert were: Hermann Weyl, the champion of chess Emanuel Lasker, Ernst Zermelo, and Carl Gustav Hempel. John von Neumann was his assistant. At the University of Göttingen, Hilbert was surrounded by a social circle of some of the most important mathematicians of the 20th century, such as Emmy Noether and Alonzo Church.

Among his 69 Ph.D. students in Göttingen were many who later became famous mathematicians, including (with date of thesis): Otto Blumenthal (1898), Felix Bernstein (1901), Hermann Weyl (1908), Richard Courant (1910), Erich Hecke (1910), Hugo Steinhaus (1911), Wilhelm Ackermann (1925). Between 1902 and 1939 Hilbert was editor of the Mathematische Annalen, the leading mathematical journal of the time.

Hilbert lived to see the Nazis purge many of the prominent faculty members at University of Göttingen, in 1933. Among those forced out were Hermann Weyl, who had taken Hilbert's chair when he retired in 1930, Emmy Noether and Edmund Landau. One of those who had to leave Germany was Paul Bernays, Hilbert's collaborator in mathematical logic, and co-author with him of the important book Grundlagen der Mathematik (which eventually appeared in two volumes, in 1934 and 1939). This was a sequel to the Hilbert-Ackermann book Principles of Mathematical Logic from 1928.

About a year later, he attended a banquet and was seated next to the new Minister of Education, Bernhard Rust. Rust asked, "How is mathematics in Göttingen now that it has been freed of the Jewish influence?" Hilbert replied, "Mathematics in Göttingen? There is really none any more."

By the time Hilbert died in 1943, the Nazis had nearly completely restaffed the university, inasmuch as many of the former faculty had either been Jewish or married to Jews. Hilbert's funeral was attended by fewer than a dozen people, only two of whom were fellow academics, among them Arnold Sommerfeld, a theoretical physicist and also a native of Königsberg. News of his death only became known to the wider world six months after he had died.