Kolarov was born in Shumen, Bulgaria. After graduating from high school in Varna, he worked as a teacher in Nikopol from 1895 to 1897, where he joined the Bulgarian Workers' Social Democratic Party (BWSDP). He studied law in Aix-en-Provence, France, and in Geneva. Following his graduation in 1900, Kolarov worked as a lawyer in his hometown and, from 1904, in Plovdiv. After the ideological split of the BWSDP, he remained in Dimitar Blagoev's Narrow (revolutionary) wing and was subsequently elected to the National Assembly (parliament) in 1913 and 1920. By this time, Kolarov was among the leaders of the party, and was an active participant in the Comintern, becoming its secretary general from 1922 to 1924. In 1923, he led a communist uprising along with Georgi Dimitrov. The uprising failed and Kolarov fled to the Soviet Union. During his exile, he held various academic and political posts in the Soviet Union and the Comintern.
Kolarov returned to Bulgaria in 1945 during its occupation by the Soviet Union, and was elected to the National Assembly again. He was reelected in 1946 and became provisional president of Bulgaria that year, amidst the growing domination of the communists. He remained president until 1947 and then became foreign minister in the Dimitrov government. When Dimitrov died in July 1949, Kolarov was elected to replace him. He served as prime minister until his own death a few months later. He died in Sofia.