Kolbe was born in Evanston, Illinois. He was a Congressional Page in high school, working in the Capitol Building where he would later serve as a Congressman. Kolbe was educated at Northwestern University and Stanford University, served in the United States Navy, and was a special assistant to Illinois Governor Richard Ogilvie, a business executive, and a member of the Arizona Senate before entering the House. He is one of three openly gay members (with Barney Frank and Tammy Baldwin) of the United States House of Representatives. He is the second openly gay Republican to serve in the United States House of Representatives, Steve Gunderson being the first.

Kolbe revealed his homosexuality in August 1996 after his vote in favor of the Defense of Marriage Act spurred efforts by some in the gay community to out him. In spite of the campaign, he won re-election. In 2000, he became the first openly gay person to address the Republican National Convention, though his speech did not address gay rights. He has been mild in his support of same-sex marriage, although strong in his support of universal civil unions. Kolbe supports abortion rights and is a strong proponent of guest worker programs for immigrants. All of these stances have caused some resentment in the Republican Party as well as a formidable primary challenger (Randy Graf) in 2004.

Kolbe serves as Chair of the Subcommittee on Foreign Operations, Export Financing and Related Programs of the House Appropriations Committee.

Kolbe is a member of various Moderate/Liberal Republican Groups such as the Log Cabin Republicans, the Republican Main Street Partnership, the Republican Majority For Choice, Republicans for Choice, Republicans For Environmental Protection and Its My Party Too.

On November 23, 2005, Kolbe announced he would not seek a 12th term in 2006. His exit leaves the district open, it being considered politically competitive (George W. Bush narrowly edged out Al Gore and John Kerry in Arizona's 8th.)