After studying physics at the Universities of Ulm and Konstanz and physical oceanography at the University of Wales (Bangor), Stefan Rahmstorf completed a thesis on general relativity theory. He then moved to New Zealand and obtained his PhD in oceanography at Victoria University of Wellington in 1990. His PhD work included a number of research cruises in the South Pacific.

Following his PhD, he worked as a scientist at the New Zealand Oceanographic Institute, at the Institute of Marine Science in Kiel and since 1996 at the Potsdam Institute for Climate Impact Research (PIK). His work there focuses on the role of ocean currents in climate change.

In 1999 Rahmstorf was awarded the $1 million Centennial Fellowship Award of the US-based James S. McDonnell foundation. From 2000 he has been teaching Physics of the Oceans as a professor at Potsdam University. Rahmstorf is a member of the Academia Europaea and of the German Advisory Council on Global Change (WBGU). He is also one of the lead authors of the 4th Assessment Report of the IPCC. In 2007 he became an Honorary Fellow of the University of Wales.