Otto Selz was born in Munich. At his parents' wish, he initially studied law, but also philosophy and psychology, among others with Carl Stumpf in Berlin and Theodor Lipps in Munich.
It was not until 1910 that he became an assistent of Oswald Külpe, who was then already at the University of Bonn. Nevertheless, Selz's habilitation thesis "Über die Gesetze des geordneten Denkverlaufs" (On the laws of the ordered thought process) is one of the highlights of the Würzburg School of Thought.

Due to his Jewish faith, Otto Selz was removed from office by the National Socialists in 1933. He was arrested during the Reichsprogromnacht and deported to Dachau. From there he was released with the help of influential friends and emigrated to Amsterdam, Netherlands. After the German occupation in 1940, he lived in the ghetto for three years, before he was deported to Auschwitz and murdered.