Caracciola was born in the town of Remagen, Germany in 1901 the son of parents who originally came from Italy. He won his first race at the age of 22. He worked as a salesman at newly formed Daimler-Benz and was allowed to race on weekends if the race was within driving distance of the Dresden agency.
Caracciola would gain fame throughout Germany racing the legendary white SSK for Mercedes. He was renowned for his wet weather prowess. In 1929 he scored one of his greatest victories at the Tourist Trophy in Northern Ireland. Racing against the cream of Great Britain, including Bentley ace Tim Birkin, he came from a five lap handicap to win the thirty lap race in a rain storm. His victory in the 1931 Mille Miglia was not equaled by another non-Italian for 24 years until Stirling Moss won it in 1955.