He was born in Losonc (which is now Lučenec, Slovakia), in the Austro-Hungarian Empire to the family of a Hungarian official in the local government. He took a degree in theology from the Reformed Theological Academy in Pápa, afterwards spending a year studying at the Belfast Assembly College in Ireland. He served as an active minister of the Reformed Church beginning in 1921, and edited the daily paper of the Reformed church in Hungary, the Keresztény Család (Christian Family), as well as other periodicals. In 1929, he joined the Independent Smallholders' Party (FKgP) with other noted Hungarian political figures, including Ferenc Nagy. He became executive vice-president of the organization soon afterwards.
He was elected to the Hungarian parliament, being reëlected in 1936 and 1939. He put pressure on Horthy's government to pull out of the Second World War. After Hungary was occupied by the Germans, Tildy was forced into hiding. After the Soviets liberated Hungary from the Germans, Tildy became leader of the FKgP. He became Prime Minister of Hungary, serving from November 15 1945 to February 1 1946, when Tildy was elected President of Hungary. He was an ex officio member of the High National Council from December 7, 1945 to February 2, 1946.
He served as the first President of the Republic of Hungary until July 31, 1948, when he was forced to resign after allegations emerged about his son-in-law being arrested for corruption and adultery. Tildy was held under house arrest in Budapest until May 1st, 1956. He was appointed to the position of a state minister in the coalition government during the 1956 Hungarian Revolution. He was eventually arrested by Soviet forces after the revolution was crushed by Warsaw Pact intervention. On June 15, 1958, he was sentenced by the Supreme Court to six years' imprisonment, in the trial of Imre Nagy and associates. However, he was released under an individual amnesty in April 1959 in view of his advanced years (in fact due to illness). He then lived in complete retirement until his death.