Born Calmann Mayer Rothschild in Frankfurt am Main, he was the fourth of the five sons of Mayer Amschel Rothschild (1743-1812) and Gutlé Schnapper (1753-1849). He would become known as "Carl" by the family except for his English relatives who translated it as "Charles". Raised in an increasingly prosperous family, he was trained in his father's banking business and lived at home until age twenty-nine when he acquired a modest residence at 33 Neue Mainzer Strasse in Frankfurt am Main in preparation for his marriage on September 16, 1818 to Adelheid Herz (1800-1853). They would have the following children:
Wanting to expand the family business across Europe, the eldest Rothschild son Amschel remained in Frankfurt, while each of the other sons were sent to different European cities to establish a banking branch. The 1821 occupation of Naples by the Austrian army provided the opportunity for the Rothschilds to set up business in the Kingdom. As such, Carl Rothschild was sent to Naples where he established C M de Rothschild & Figli to operate as a satellite office to the Rothschild banking family of Germany headquarters in Frankfurt am Main.
Carl Rothschild has sometimes been seen as the least gifted of the five brothers. However, he proved himself in Naples as a strong financial manager and someone very capable at developing all-important business connections. He established a good working relationship with Luigi de' Medici, the "Direttore della Segreteria di Azienda del Regno di Napoli" (Finance Minister), and his operation became the dominant banking house in Naples. As a result of Carl's success, the Rothschilds had a substantial banking presence in England and three other major European capitals, giving the family considerable influence and an advantage over their competitors.
In 1822, Carl Rothschild and his four brothers were each granted the title of baron, or Freiherr, by Austria's Francis I. During the winter of 1826, Leopold of Saxe-Coburg, future King of the Belgians was a guest of Carl von Rothschild at his villa in Naples. In 1829, Carl was appointed consul-general of Sicily at Frankfurt and in January 1832 the Jewish banker was given a ribbon and star of the Sacred Military Constantinian Order of Saint George at a ceremony with the new Roman Catholic Pope, Gregory XVI.
Carl von Rothschild maintained homes in Frankfurt am Main and in Naples. In 1837 he built the Villa Günthersburg on a large country property outside Frankfurt am Main owned by his father at what is now Günthersburg Park. In 1841, he bought the Villa Pignatelli at San Giorgio a Cremano with a spectacular view of Mount Vesuvius.
Two years after his wife Adelheid died in 1853 and one year after their son Anselm Alexander Carl died at the age of eighteen, Carl von Rothschild died in Naples. One seventh of his estate went to his daughter Charlotte with the rest divided equally between his three surviving sons. Adolf Carl took over the business in Naples from his father and Mayer Carl and Wilhelm Carl succeeded their childless uncle Amschel in Frankfurt.