Kobayashi was born in Odate, Akita, Japan and was brought up in Otaru, Hokkaidō. After graduating from the Otaru School of Higher Learning, which is the current Otaru University of Commerce, he worked at the Otaru branch of Hokkaido Takushoku Bank. His most famous work is Kanikōsen, or Crab-Canning Boat – a novel published in 1929. It tells the story of several different people and the beginning of organization into unions of fishing workers. He joined the Japanese Communist Party in 1931. The young writer was killed during a torture session by Tokkō police two years later, at age 29.
At the age of four his family moved to Otaru, Hokkaidō. The family was not wealthy, but Kobayashi's uncle paid his schooling expenses and he was able to attend Hokkaidō Otaru Commercial High School and Otaru Commercial School of Higher Learning. While studying he became interested in writing, and submitted essays to literary magazines, served in the editorial committee for his school's alumni association magazine, and also had his own writing published. One of his teachers at school was economist, critic, and poet Nobuyuki Okuma. Around this time, due to financial hardship and the current economic recession of the time, he joined the labor movement.
After graduating school he worked in the Otaru branch of the Hokkaidō Takushoku Bank. In the 1928 general election, Kobayashi helped with election candidate Kenzo Yamamoto's campaign, and went to Yamamoto's campaign speech in a village at the base of Mount Yōtei. This experience was later incorporated into his book 東倶知安行. In the same year his story March 15, 1928 (based on the March 15 incident) was published in the literary magazine Senki ("Standard of Battle" in Japanese). The story depicted torture by the Tokkō police, which in turn infuriated government officials, and would become the trigger for Kobayashi's eventual murder.
In 1929, his story Kanikōsen was also published in Senki, and quickly gained attention and became the standard bearer of proletarian literature. In July of that year it was adapted into a theatrical performance and was performed at the Imperial Garden Theater under the title 北緯五十度以北 (North of latitude 50 degrees north). However the police (in particular the Tokkō police of the time) marked him for surveillance. In the same year his essay "Absentee Landlord" (Fuzaijinushi) published in Chūōkōron magazine became grounds for his dismissal from his job at the bank.
In the spring of 1930, he moved to Tōkyō and became the secretary general of the Proletarian Writer's Guild of Japan. On May 23 he was arrested on suspicion of giving financial support to the Japan Communist Party, and was temporarily released on June 7. After returning to Tokyo on June 24, he was again arrested and in July, due to Kanikōsen he was further indicted on charges of Lèse majesté. In August, he was prosecuted under the Public Order and Police Law of 1900 and was imprisoned in Toyotama Penitentiary. On January 22 1931 he was released on bail. He then secluded himself at the Nanasawa Hot Spring in Kanagawa Prefecture. In October 1931 he became a member of the outlawed Japan Communist Party . In November he visited the mansion of Naoya Shiga in Nara Prefecture. In the spring of 1932 he went underground. On February 20 1933 he went to a meeting spot in Akasaka to meet with a fellow Communist Party member, who was in reality a spy from the Tokkō police who had infiltrated the party. The Tokkō were lying in wait for him, and although he tried to escape, he was captured and arrested. He was apparently stripped naked in the freezing winter cold, beaten with thick sticks, and then taken to a hospital where he died at 7:45 pm.
Police authorities announced the following day that he had died of a heart attack. However the next day when his family received his body, they saw his whole body was swollen from torture, in particular the lower half of his body was darkish from internal haemorrhaging. No hospital would perform an autopsy for fear of the Tokkō police. His postmortem face was published in the Communist Party newspaper Shimbun Akahata.
In 2008, Kanikōsen became the "surprise runaway best-selling book of the year" in Japan. 
In 1933 The Cannery Boat was translated and published by the International Publishers in New York
In 1973, an English translation of his two novels by Frank Motofuji under the titles, The Factory Ship (Kani kōsen) and The Absentee Landlord (Fuzai jinushi) was published by the University of Tokyo Press under sponsorship from UNESCO.
- "Japan's burgeoning class: Working Poor". The San Francisco Chronicle. http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/26/international/i081406D49.DTL.
- "The Factory Ship (Kani kosen. The Absentee Landlord Fuzai jinushi)". http://www.unesco.org/culture/lit/rep/pop.php?fnc=record&lng=en_GB&record=5731.
- e-texts of Takiji's works at Aozora bunko
- Takiji Kobayashi's grave
- German translation of "March 15, 1928" at Marxists.org