Joseph Fraunhofer was the 11th child, born into a Roman Catholic family in Straubing, in the Electorate of Bavaria, to Franz Xaver Fraunhofer and Maria Anna Fröhlich. His father and paternal grandfather Johann Michael had been master glassmakers in Straubing. Fröhlichs family also came from a lineage of glassmakers going back to the 16th century.  He was orphaned at the age of 11 and started working as an apprentice to a harsh glassmaker named Philipp Anton Weichelsberger. In 1801, the workshop in which he was working collapsed, and he was buried in the rubble. The rescue operation was led by Prince-Elector Maximilian Joseph. The prince entered Fraunhofers life, providing him with books and forcing his employer to allow the young Fraunhofer time to study.
Joseph Utzschneider, a privy councilor, was also at the site of the disaster, and would also become a benefactor to Fraunhofer. With the money given to him by the prince upon his rescue and the support he received from Utzschneider, Fraunhofer was able to continue his education alongside his practical training. In 1806, Utzschneider and Georg von Reichenbach brought Fraunhofer into their Institute at Benediktbeuern, a secularised Benedictine monastery devoted to glassmaking. There he discovered how to make fine optical glass and invented precise methods for measuring optical dispersion.
It was at the Institute that Fraunhofer met Pierre-Louis Guinand (de), a Swiss glass technician, who instructed Fraunhofer in glassmaking at Utzschneiders behest. By 1809, the mechanical part of the Optical Institute was chiefly under Fraunhofers direction, and Fraunhofer became one of the members of the firm that same year. In 1814, Guinand left the firm, as did  Reichenbach. Guinand would later become a partner with Fraunhofer in the firm, and the name was changed to Utzschneider-und-Fraunhofer. During 1818, Fraunhofer became the director of the Optical Institute. Due to the fine optical instruments developed by Fraunhofer, Bavaria overtook England as the center of the optics industry. Even the likes of Michael Faraday were unable to produce glass that could rival Fraunhofer.
His illustrious career eventually earned him an honorary doctorate from the University of Erlangen in 1822. In 1824, Fraunhofer was appointed a Knight of the Order of Merit of the Bavarian Crown by King Maximilian I, through which he was raised into personal nobility (with the title "Ritter von", i.e. knight). The same year, he was also made an honorary citizen of Munich.
Like many glassmakers of his era, he was poisoned by heavy metal vapors, resulting in his premature death. Fraunhofer died in 1826 at the age of 39. His most valuable glassmaking recipes are thought to have gone to the grave with him.