Harnack was the son of literary history professor Otto Harnack, the elder brother of Falk Harnack, Inge Harnack and Angela Harnack as well as the nephew of theologian Adolf von Harnack. From 1919 to 1923, he studied law in Jena (at the Friedrich Schiller University), Graz, and Hamburg and became a Doctor of Law in 1924.
From 1926 to 1928, he studied economics at the University of Wisconsin in Madison in the United States, where in 1926 he married the literary historian Mildred Fish. In 1929-1930 he became a Doctor of Philosophy in Gießen, producing as his thesis Die vormarxistische Arbeiterbewegung in den Vereinigten Staaten ("The Pre-Marxist Workers' Movement in the United States"). Along with the Gießen economist Friedrich Lenz (1885–1968), he founded the Wissenschaftliche Arbeitsgemeinschaft zum Studium der sowjetischen Planwirtschaft ("Scientific Working Community for the Study of the Soviet Planned Economy"), or ARPLAN in 1931. Harnack was made First Secretary of this group, which counted about 50 members. At the height of the Great Depression, the capitalist system had clearly broken down, and the Soviet model seemed to them to be an interesting alternative. Scientists, but also ardent revolutionary nationalists like Klaus Mehnert and Ernst Jünger and communist intellectuals like George Lukacs and Karl August Wittfogel took part in sessions. Harnack's hope, apparently, was that Germany could serve as a spiritual and economic bridge between East and West. The first meeting of the group took place on 3 and 4 January 1932. In August and September of the same year a three-week trip to the Soviet Union was organized with the help of the Soviet embassy in Berlin. The soviet economy was observed in Moscow, Leningrad, Odessa, Kiew and in the Dnieper region. Trips to the United States in 1937 and 1939 would follow, during which Harnack unsuccessfully tried to create a basis of communication with Washington.
In 1933, after Hitler's rise to power made it necessary to dissolve ARPLAN, Harnack was given a post as a scientific expert in the Reich Economic Ministry. The same year, he also finished his legal qualifications in Jena, successfully completing the junior law examination.
Together with his wife, Mildred, the writer, Adam Kuckhoff, and his wife, Greta, Harnack assembled a discussion circle which debated political perspectives on the time after the National Socialists' expected downfall or overthrow.
By 1935, Harnack was active as a lecturer on foreign policy at the University of Berlin.
From 1937–41, Harnack, through a contact of his American wife, Mildred, held close contact with Donald Heath, the First Secretary at the US Embassy, to inform the US about Hitler's preparations for war. In 1941, after the Americans left Berlin, Harnack was contacted by the Soviets, and agreed to supply them with information about Hitler's war preparations. Unbeknownst to him, they applied the code names Balte and Corsican to him. While Harnack's relations with the Americans had been based on a mutual friendship with Heath, his relation with the Soviets was reluctant, as he didn't trust Stalin.
As a cover, Harnack became a member of the NSDAP in 1937. In 1935 came his first contact with Harro Schulze-Boysen, an air force lieutenant and descendant of an old German military family, and, in 1940, with the Communists Hilde Rake and Hans Coppi, as well as with Social Democrats like Adolf Grimme.
The resulting network was far reaching and didn't have a name. After the arrests, the Gestapo labeled them Red Orchestra (Rote Kapelle). In the Gestapo's terms, a spy hitting Morse codes was a pianist, a group of pianists formed an orchestra, and, as Communists, they were red. In reality, the resistance group had members from all walks of life. Membership included people from all social classes and age groups, and also from varied religious ideologies, e.g., mainly communist and National Bolshevik, and Jews and Christians. The group was also 40% female, practicing the egalitarian beliefs that were also present in the Irish Citizen Army and Cumann na mBan during the 1916 Irish Rebellion. In 1941, Harnack sent the Soviets information about the forthcoming invasion. That same year, he published the resistance magazine, Die innere Front ("The Inner Front"). At about the same time, he received information from Rudolf von Scheliha about the Final Solution.
In 1941, through a Soviet Military blunder, addresses of members of the group were transmitted across Europe in an attempt by the Soviets to re-connect with the resisters. A year later, in July 1942, the Decryption Department of the Oberkommando des Heeres managed to decode the group's radio messages, and the Gestapo pounced. On 7 September, Arvid and Mildred Harnack were arrested. Arvid Harnack was sentenced to death on 19 December after a four-day trial before the Reichskriegsgericht ("Reich Military Tribunal"), and was put to death three days later at Plötzensee Prison in Berlin. Infuriated about the diversity of the group, Hitler re-instated the death by hanging for them and secretly had the meat hooks installed at Plötzensee, which became publicly known only 2 1/2 years later during the July 20th executions. Harnack's wife Mildred was originally given six years in prison, but Hitler swiftly cancelled the sentence and ordered a new trial, which pronounced the desired death sentence. After execution, both of their bodies were released to Hermann Stieve, anatomy professor at Humboldt University, to be dissected for research. An honorary grave was installed for them after the war by Arvid's brother Falk Harnack, a member of the White Rose resistance group, at Zehlendorf Cemetery, the location of their remains is unknown.