Collodi was born in Florence.

During the Wars of Independence in 1848 and 1860 Collodi served as a volunteer with the Tuscan army. His active interest in political matters may be seen in his earliest literary works as well as in the founding of the satirical newspaper Il Lampione. This newspaper was censored by order of the Grand Duke of Tuscany in 1849 but re-emerged in May 1860.

Lorenzini had won fame as early as 1856 with his novel In vapore and had also begun intense activity on other political newspapers such as Il Fanfulla; at the same time he was employed by the Censorship Commission for the Theatre. During this period he composed various satirical sketches and stories (sometimes simply by collating earlier articles), including Macchiette (1880), Occhi e nasi (1881), Storie allegre (1887).

In 1875, he entered the domain of children's literature with Racconti delle fate, a translation of French fairy tales by Perrault. In 1876 Lorenzini wrote Giannettino (inspired by Alessandro Luigi Parravicini's Giannetto), the Minuzzolo, and Il viaggio per l'Italia di Giannettino, a series which explored the re-unification of Italy through the ironic thoughts and actions of the character Giannettino.

Lorenzini became fascinated by the idea of using an amiable, rascally character as a means of expressing his own convictions through allegory. In 1880 he began writing Storia di un burattino ("The story of a marionette"), also called Le avventure di Pinocchio, which was published weekly in Il Giornale dei Bambini (the first Italian newspaper for children).

Lorenzini died in Florence in 1890, unaware of the fame and popularity that awaited his work: as in the allegory of the story, Pinocchio eventually went on to lead his own independent life, distinct from that of the author.

Lorenzini is interred at San Miniato al Monte Basilica.