Born in Tezpur, Assam, his father, Nirmal Chandra Chatterjee, was a prominent lawyer, intellectual, and Hindu revivalist and nationalist around the time of India's independence, and his mother, Binapani Debi ran the home. Nirmal Chandra Chatterjee was one of the founders and one-time president of the Akhil Bharatiya Hindu Mahasabha. In 1948, when the Communist Party of India was banned by the Jawaharlal Nehru led Indian National Congress government in India, and its party leaders arrested, Nirmal Chandra Chatterjee formed the All India Civil Liberties Union, and agitated for their release. In the process, he came close to Jyoti Basu, in spite of continuing ideological political differences between the two.
Somnath was educated at Mitra Institution School, Presidency College and then the University of Calcutta in Calcutta. He also attended Jesus College, Cambridge and graduating with a B.A. in 1952 and a M.A. in 1957, both in law, has been awarded an honorary fellowship by the college in 2007. He was called to the bar from the Middle Temple in London and took up legal practice as an advocate at the Calcutta High Court before joining active politics.
Somnath Chatterjee was a member of the Communist Party of India (Marxist) (CPI(M)) from 1968 to 2008. In 1971, he was nominated to contest an interim election caused by the death of his father, who had been elected from that constituency. He became a Member of the Lok Sabha in 1971 and was elected the first time as an independent candidate supported by the CPI(M). Subsequently he was re-elected nine times, except once when he lost to Mamata Banerjee in the Jadavpur Lok Sabha constituency in 1984. From 1989 until 2004 he was the leader of his party in the Lok Sabha. He was elected for the tenth time in 2004 as a member of the 14th Lok Sabha from Bolpur Lok Sabha constituency, which is considered to be a CPI(M) stronghold. Following the 2004 election, he was appointed as the pro tem speaker and subsequently on 4 June 2004 he was unanimously elected as the Speaker of the 14th Lok Sabha. He was the second pro tem Speaker after Ganesh Vasudev Mavalankar to achieve this feat.
After the CPI (M) withdrew its support for the United Progressive Alliance-led government in mid-2008, the party included Chatterjee's name on its list of MPs who were withdrawing their support from the government, despite his non-partisan position as Speaker. Chatterjee, however, appeared unwilling to follow the party line to vote against the government in a crucial July 2008 confidence vote, as voting against the government would mean voting alongside the right-wing opposition BJP. Ignoring the party's instructions, he decided to stay on in his post as Speaker of the House, acting in this capacity during the confidence vote. Following the vote, which the government survived, on 23 July 2008, the CPI (M) expelled him from the party for violation of party discipline. A CPI (M) press release said, "The Politburo of the Communist Party of India-Marxist has unanimously decided to expel Somnath Chatterjee from the membership of the party with immediate effect. This action has been taken under Article XIX, clause 13 of the Party Constitution for seriously compromising the position of the party." Bengal secretary Biman Bose said "Chatterjee may have acted according to the Indian Constitution but the party constitution is supreme in [the] case of party members."
According to Chatterjee, the expulsion was "one of the saddest days" of his life. He suggested that future speakers should resign from their parties while serving in that office to help ensure its non-partisan standing. His constituency of Bolpur had already been reserved for the Scheduled Castes, meaning he would have been unable to contest the seat in the next election; he announced in August 2008, following his expulsion from the CPI(M), that he would retire from politics at the time of the next election in 2009. He was broadly respected in his constituency; the CPI(M)'s 2009 candidate, Ramchandra Dom, expressed admiration for Chatterjee and vowed to continue his work, while the Congress candidate, Asit Mal, said that the people of Bolpur were "hurt at the way [Chatterjee] was driven out of the CPI-M" and that their feelings would "be reflected in the results".
In 1996 he won the Outstanding Parliamentarian Award.
In 2005, he was caught in a controversy over his statement on the Supreme Court orders related to the vote of confidence in the Jharkhand Assembly. He said that the Supreme Court was encroaching on the right of the Legislature by issuing orders on the proceedings of the Jharkhand Assembly. He asked for a Presidential reference to the Supreme Court under Article 143 of the Indian Constitution. This remark was criticised by Bharatiya Janata Party which supported the Supreme Court's decision.
The Opposition demanded his resignation because he held an office of profit as Chairman of Santiniketan Sriniketan Development Authority (SSDA). He argued that since he did not profit from the office, the demand was baseless.
Chatterjee married Renu Chatterjee, who comes from the zemindar family in Lalgola, on 7 February 1950. The couple have one son, Pratap and two daughters, Anuradha and Anushila. Pratap Chatterjee is presently practising in Calcutta High Court.
Somnath Chatterjee is known for his fiscal integrity. When in 2004, as speaker, he moved into the official residence at 20 Akbar Road, he discontinued the practice of paying for toiletries and tea from the national exchequer. On trips abroad, he bore the expenses of any accompanying family members.
Chatterjee died on 13th of August 2018 morning following a reported heart attack in a private hospital in Kolkata.