Born in Bobrinsk, Belorussia, Katznelson was the son of a member of Hovevei Zion. He went to Palestine 1909 becoming leader of the Zionist labor movement and a central figure of the Second Aliyah. Katznelson was the founder of the Histadrut labor federation and the editor of the Histadrut's newspaper Davar. He made the newspaper a spiritual guide for the labor class and attracted many readers. He helped initiate Kuppat Holim, the Sick Fund. Katznelson, who was deeply committed to maintaining the influence of Jewish values, was instrumental in pressing for "illegal" immigration in 1938. Under his guidance, followers parachuted into Nazi-held territory to try to aid Jewish survivors.

Although he predicted that the Jews would have a Jewish state after WWII, he died in 1944 before and so never saw the state of Israel. In her autobiography, My Life, Golda Meir, described him as, "…the one man whom all of us, including Ben-Gurion, deeply revered… "