He was born in the United Kingdom in 1903, son of German communists, and was a British citizen, but lived most of his life in Russia. His original training seems to have been in signals intelligence but later he also acted as a a spy ring organiser. Before and during World War II he conducted operations for the Soviets in Norway, Britain, and Galicia. In 1948 he was sent to the USA to completely reorganise Soviet espionage in that country and Latin America, and to create sabotage cells. Two of his agents, Lona and Morris Cohens are believed to have been the couriers for Rosenburg/Greenglass/Fuchs nuclear spy ring, and later operated in Britain as Peter and Helen Kroger.

Fischer was captured by the FBI in 1957, partially as the result of the defection of his assistant Reino Hayhanen, in what became known as the "Hollow Nickel Case".

He was sentenced to 30 years imprisonment for espionage, but in 1962 he was "exchanged" for U2 pilot Gary Powers.

Fischer is said to have despised Kim Philby in Moscow. He died from lung cancer in 1971.