Droysen was born at Treptow in Pomerania (now Trzebiatów in Poland) on 6 July 1808. His father, Johann Christoph Droysen, was an army chaplain who had been present at the celebrated siege of Kolberg in 1806–1807. As a child, Droysen witnessed some of the military operations during the War of Liberation, his father by then being pastor at Greifenhagen, in the immediate neighbourhood of Stettin, which was held by the French for most of 1813. These youthful impressions laid the foundation of his ardent attachment to the Kingdom of Prussia. He was educated at the gymnasium of Stettin and at the University of Berlin; in 1829 he became a master at the Graues Kloster, one of the oldest schools in Berlin; in addition, he gave lectures at the University of Berlin, from 1833 as Privatdozent, and from 1835 as professor, without a salary. The famed historian Jacob Burckhardt visited his class in his last semester (1839–40).
During these years Droysen studied classical antiquity; he published a translation of Aeschylus in 1832 and a paraphrase of Aristophanes (1835–1838), but the work by which he made himself known as a historian was his Geschichte Alexanders des Grossen (History of Alexander the Great; Berlin, 1833 and other editions), a book that long remained the best work on Alexander the Great. It was in some ways the herald of a new school of German historical thought, for it idealized power and success, a conceptual framework Droysen had learned from the teaching of Hegel. Droysen followed the biography of Alexander with other works dealing with Alexander's Greek successors, published under the title of Geschichte des Hellenismus (Hamburg, 1836–1843), in which he created the term "Hellenistic" to refer to the period between Alexander's conquests and the emergence of the Roman Empire. A new and revised edition of the whole work was published in 1885, and translated into French, but not at the time into English. His Vorlesung des Freiheits Krieg (in English: Lectures of the War of Liberation) appeared in 1846 and his Outlines of the Principles of History, published 1858, translated 1893, was widely read throughout German universities. He followed this with Erhebung der Geschichte zum Rang einer Wissenschaft (1863), a methodological study that reflected his new approach to research and writing.
In 1840, Droysen was appointed professor of history at the University of Kiel. There, the political movement for the defense of the rights of the Elbe duchies, of which Kiel was the center, attracted his interest. Like Friedrich Christoph Dahlmann, he placed his historical learning at the service of the estates of Schleswig and Holstein and composed the address of 1844, in which the estates protested against the claim of King Christian VIII of Denmark to alter the law of succession in the duchies. The issue was diplomatically negotiated through the London Protocol of 1852, and ultimately resolved in a war between Denmark and allied forces from Austria and Prussia in the Second Schleswig War.
Droysen's first great political appearance occurred in 1843, on the one thousand year anniversary of the Verdun agreement between Karl the Bald and Ludwig the German, grandsons of Charlemagne. The patrimony of Charlemagne, and his son, Louis the Pius; Droysen found in this event the evidence of the German nation. Later, Droysen gave a lecture to a crowded audience in Berlin entitled the Agreement at Verdun, which was greeted with enthusiasm not only by the listeners but also the German Kaiser himself.
In 1848, Droysen was elected a member of the revolutionary Frankfurt parliament and acted as secretary to the committee for drawing up a proposed constitution. He was a determined supporter of Prussian ascendancy, seeing this as the only feasible route to German unification.