Born in 1911 near Budapest, then Austria-Hungary, he grew up in Vienna and immigrated with his family to what was then British mandate Palestine in 1935.
During the Second World War, Kollek represented Jewish interests in Europe as a member of the Haganah. He later arranged the clandestine purchase of weapons for Israel's forthcoming war with the surrounding Arab countries pledged to annihilate her.
After the establishment of the State of Israel, Kollek became a close ally of David Ben-Gurion, Israel's first prime minister. He served as the official envoy to Washington D.C and later was appointed as Director General of the Prime Minister's Office.
Kollek was elected Mayor of Jerusalem in 1965, and remained in that position for a total of six terms of office, until 1993. He is generally considered to be responsible for the reunification and modernization of Jerusalem after the Six-Day War, in 1967. For almost three decades his force of character powered Jerusalem's transition from an ancient city with a glorious past to a world capital of culture and politics. During his 28 years as mayor, the city developed economically, culturally, and socially, filling its proper place as Israel's modern capital.
Also in his tenure, many public buildings and institutes were built in Jerusalem, including the Israel Museum, of which Teddy was among the founders, the Jerusalem Theater, the Jerusalem Cinematheque, the "Teddy" Stadium (dedicated to him), Safra Square and many more.
In a city famed for disputes over serious and seemingly trivial matters alike, Kollek, a man of peace, was a bridge between Israeli and Palestinian national aspirations as well as between rival religious and ethnic groups of both communities. He preached fairness to the city's Arab population, and strove for development of both Jewish and Arab sections of the city.
In 1988, Kollek was awarded Israel's highest civilian honor, the Israel Prize, for his contributions to the building of modern Jerusalem.
In a tribute to Kollek, Ruth Chesin, president of the Jerusalem Foundation, established by Kollek as a means of obtaining funds for the development of the city, called him "a unique and special man, who saw all residents of the city, Christian, Jew and Muslim as equal partners. He strived to turn the city into a beacon of hope for all its residents."