He was taught the organ from 1874 to 1877 by Joseph Rheinberger and attended the Choir lessons of Franz Wüllner in Munich. Immediately after that, he moved to Dresden, where he was appointed director and a teacher for Theory and Choir Songs at the Dresden School of Music. From 1878 he was also conductor of the Dresdner Liedertafel orchestra. From 1882 to 1908, he initially taught Organ and Choir at the National Music Academy of Budapest in Hungary. Later, he also became Professor for composition and was also given a peerage.
His students became some of the best Hungarian composers of the time: Zoltán Kodály, Béla Bartók, Emmerich Kálmán, Ernst von Dohnányi and Leó Weiner. After his retirement in 1908, he returned to Germany, but became appointed to the agency of Kálmán and Dohnányi in order to ensure that he received a moderate income.
Koessler composed over 130 works, including an opera, two symphonies, symphonic variation for Orchestra, a violin concerto, two string quartets, a string quintet, a string sextet, a piano quintet, a suite for piano, violin and viola, an exhibition for Female Choir and Organ. He also put psalms to music. However, as a result of his erratic way of living, a large number of his compositions were lost, or found themselves only being played in private hands.
Koessler's chamber music has been highly praised by several commentators, including the eminent chamber music scholar Wilhelm Altmann who has singled out Koessler's Second String Quartet and his Trio Suite for Piano, Violin & Viola for especial praise.
He died in Ansbach.