Dunant was born in Geneva, Switzerland as the first son of businessman Jean-Jacques Dunant and his wife Antoinette Dunant-Colladon. His family was very devoutly Calvinist and had significant influence in Geneva society. His parents strongly stressed the value of social work, and his father was active helping orphans and parolees, while his mother worked with the sick and poor.

Dunant grew up during the period of religious awakening known as the Réveil, and at age eighteen he joined the Geneva Society for Alms giving. In the following year, together with friends, he founded the so-called "Thursday Association", a loose band of young men that met to study the Bible and help the poor, and he spent much of his free time engaged in prison visits and social work. On November 30, 1852, he founded the Geneva chapter of the YMCA and three years later he took part in the Paris meeting devoted to the founding of its international organization.

In 1849, at age 21, Dunant was forced to leave the Collège Calvin because of bad grades, and he began an apprenticeship with the money-changing firm Lullin et Sautter. After its successful conclusion, he remained as an employee of the bank.

In 1853, Dunant visited Algeria, Tunisia, and Sicily, on assignment with a company devoted to the "colonies of Setif" (Compagnie genevoise des Colonies de Sétif). Despite little experience, he successfully fulfilled the assignment. Inspired by the trip, he wrote his first book with the title An Account of the Regency in Tunis (Notice sur la Régence de Tunis), published in 1858.

In 1856, he created a business to operate in foreign colonies, and, after granted a land concession by French-occupied Algeria, a corn-growing and trading company called the Financial and Industrial Company of Mons-Djémila Mills (Société financière et industrielle des Moulins des Mons-Djémila). However, the land and water rights were not clearly assigned, and the colonial authorities were not especially cooperative. As a result, Dunant decided to appeal directly to French emperor Napoléon III, who was with his army in Lombardy at the time. France was fighting on the side of Piedmont-Sardinia against Austria, who had occupied much of today's Italy. Napoleon's headquarters were located in the small city of Solferino. Dunant wrote a flattering book full of praise for Napoleon III with the intention to present it to the emperor, and then traveled to Solferino to meet with him personally.

Dunant arrived on Solferino on the evening of June 24, 1859, on the same day a battle between the two sides had occurred nearby. Thirty-eight thousand wounded, dying and dead, remained on the battlefield, and there appeared to be little attempt to provide care. Shocked, Dunant himself took the initiative to organize the civilian population, especially the women and girls, to provide assistance to the injured and sick soldiers. They lacked sufficient materials and supplies, and Dunant himself organized the purchase of needed materials and helped erect makeshift hospitals. He convinced the population to service the wounded without regard to their side in the conflict as per the slogan "Tutti fratelli" (All are brothers) coined by the women of nearby city Castiglione delle Stiviere. He also succeeded in gaining the release of Austrian doctors captured by the French.

After returning to Geneva early in July, Dunant decided to write a book about his experiences, which he titled Un Souvenir de Solferino (A Memory of Solferino). It was published in 1862 in an edition of 1,600 copies and was printed at Dunant's own expense. Within the book, he described the battle, its costs, and the chaotic circumstances afterwards. He also developed the idea that in the future a neutral organization should exist to provide care to wounded soldiers. He distributed the book to many leading political and military figures in Europe.

Dunant also began to travel through Europe to promote his ideas. His book was largely positively received, and the President of the Geneva Society for Public Welfare, jurist Gustave Moynier, made the book and its suggestions the topic of the February 9, 1863 meeting of the organization. Dunant's recommendations were examined and positively assessed by the members. They created a five-person Committee to further pursue the possibility of their implementation and made Dunant one of the members. The others were Moynier, the Swiss army general Henri Dufour, and doctors Louis Appia and Théodore Maunoir. Their first meeting on February 17, 1863 is now considered the founding date of the International Committee of the Red Cross.

From early on, Moynier and Dunant had increasing disagreements and conflicts regarding their respective visions and plans. Moynier considered Dunant's idea to establish neutrality protections for care providers implausible and advised Dunant not to insist upon this concept. However, Dunant continued to advocate this position in his travels and conversations with high-ranking political and military figures. This intensified the personal conflict between Moynier, who took a rather pragmatic approach to the project, and Dunant who was the visionary idealist among the five, and led to efforts by Moynier to attack Dunant and his bid for leadership.

In October 1863, 14 states took part in a meeting in Geneva organized by the committee to discuss the improvement of care for wounded soldiers. Dunant himself, however, was only a protocol leader because of Moynier's efforts to diminish his role. A year later on August 22, 1864, a diplomatic conference organized by the Swiss Parliament led to the signing of the First Geneva Convention by 12 states. Dunant, again, was only in charge of organizing accommodation for the attendees.