Rabbi Naftali HaKohen Katz was born around 5409 (1648/1649) in Ostroh, Volhynia (today in Ukraine), into a family of rabbis. His father, Rabbi Yitzchak HaKohen, a descendant of the Maharal of Prague, av beit din of Stepan and preacher in Prague, had fled there during the Cossack wars; his mother was Eidel, daughter of Rabbi Menachem Stangen (Margaliot), av beit din of Przemysl. In his youth, in 1663, he was captured by the Tatars, who kept him in servitude for several years, until he escaped and returned to Ostroh, where he was chosen to succeed his father.

He married Esther Sheindel, daughter of Rabbi Shmuel Shmelke Zak, av beit din of Ostroh, who appointed him rosh yeshiva and gabbai of the beit midrash he had built with his own money. In 1690 he was called to Posen (Poznań), where he served as chief rabbi and head of the Chevra Kadisha until 1704, devoting himself to Kabbalah and collecting a large library of kabbalistic works. There he left an amulet inside a deer's head, which the Jews of the city regarded as an effective protection against fire. In 1704 he was called to the rabbinate of Frankfurt am Main.

On 24 Tevet 5471 (January 14-15, 1711), a great fire that broke out in his house destroyed the entire Jewish quarter of Frankfurt. Although he was acquitted at trial, where it emerged that a non-Jewish tenant was responsible, he was accused of having relied on his kabbalistic amulets and prevented the fire from being extinguished by ordinary means; he was imprisoned and regained his freedom only by renouncing his office. He then went to Prague, where he taught in the yeshiva of Rabbi David Oppenheim. There he met the Sabbatean Nechemia Chiya Chayun, to whose book he granted an approbation; he later withdrew it, claiming he had been deceived, and joined the Chacham Tzvi in the ban against Chayun. In 1715 he tried unsuccessfully to regain his rabbinate in Posen, and then returned to Ostroh.

His main work, Birkat Hashem (Frankfurt, 1702), combines Semichat Chachamim, which explains the sequence of the tractates of the Mishnah, and Kedushah Uvrachah, a commentary on tractate Berachot; it is as the author of Semichat Chachamim that he is remembered. He also wrote Pi Yesharim, a kabbalistic introduction to Genesis, Meshech HaZera on Seder Zeraim, the prayer book Beit Rachel, Selichot with a commentary, and an ethical will (Tzava'ah) full of teachings, reprinted several times.

In 5478 (1718) he decided to go up to Eretz Israel, but died on the way in Constantinople on 24 Tevet 5479, and was buried there. He left a large rabbinic progeny: his sons served as av beit din in Brody, Posen, Ostroh, Kremsier, Breslau and Prossnitz, and the Chacham Tzvi was his mechutan. Among his descendants are Rabbi Aryeh Leib Heller, author of the Ketzot HaChoshen, and the chassidic dynasties of Zhidachov, Stretin and Belz.