Stern was born 25 January 1901, in Kraków. He was an important leader in the Jewish community, and was the vice president of the Jewish Agency for Western Poland and a member of the Zionist Central Committee.

In 1938, Stern was engaged to Sophia Backenrot, although the marriage was postponed until after the war.

On 18 November 1939, during the early months of the Nazi occupation of Poland, Oskar Schindler was first introduced to Stern, who was then working as an accountant for Schindler's fellow Abwehr agent Josef "Sepp" Aue, who had taken over Stern's formerly Jewish-owned place of employment as a Treuhander (trustee). Schindler showed Stern the balance sheet of a company he was thinking of acquiring, an enamelware manufacturer called Rekord Ltd owned by a consortium of Jewish businessmen (including Abraham Bankier) that had filed for bankruptcy earlier that year. Stern advised him that rather than running the company as a trusteeship under the auspices of the Haupttreuhandstelle Ost (Main Trustee Office for the East), he should buy or lease the business directly, as that would give him more freedom from the dictates of the Nazis, including the freedom to hire more Jews.

Kraków's Jews were imprisoned in the Kraków Ghetto six months after German troops invaded Kraków. The ghetto was fully liquidated in 1943. Those considered useful (to be used as slave labor) were sent to Płaszów, including Schindler's workers and Stern. The rest were sent to various death camps across Poland. In Płaszów, Stern and his brother Natan, along with Mietek Pemper and Joseph Bau, were forced to work in Płaszów's office, where they came into frequent contact with the camp's notorious commandant, Amon Göth. Stern helped Pemper in his efforts to prevent the closure and liquidation of Płaszów, knowing that while conditions there were terrible, liquidation likely meant the deaths of every prisoner. Stern kept in contact with Schindler throughout this time and worked to better conditions for the Jews, including transferring workers to Schindler's factory, distributing aid money, and attempting to inform the outside world of their plight.

In 1944, when the closure of Płaszów became inevitable, Schindler decided to open a new factory, the Brünnlitz labor camp, in Brněnec, occupied Czechoslovakia, for his Jewish workers in order to prevent them from being sent to death camps.

In 1938, Stern was engaged to Sophia Backenrot, who survived the war due to her Aryan appearance in the Drohobycz ghetto. Their marriage was postponed until the end of the war in 1945.

After the liberation of the Brünnlitz camp by the Red Army, Stern moved to Paris, France and eventually emigrated to Israel.

Stern died at age 68.

He was portrayed in the 1993 film Schindler's List by English actor Ben Kingsley. At the end of the film, Stern's widow Sophia appears in a procession of Schindlerjuden and the actors who portrayed them, placing stones on Schindler's grave on Mount Zion, which is a Jewish tradition showing respect for the deceased. Stern's brother Natan was also one of the Schindlerjuden in the procession.