Banana was born in Esiphezini Communal Area, Southern Rhodesia near Esigodini. His parents were a Ndebele-cultured mother and a Malawian father who had emigrated to Rhodesia. He was educated by missionaries in a local school and later studied at a teacher training institute.
He married Janet Mbuyazwe in 1961, and they had four children together. He took a diploma in theology at Epworth Theological College in Harare and was ordained as a United Methodist minister in 1962. He was a student at Wesley Theological Seminary in Washington, D.C. in 1974 and 1975. Becoming involved in politics, he denounced Ian Smith's practices as a prime minister, took part in the rising transnational black liberation ideo-religious movements, and came to be vice-president of the African National Council.
He wrote a book entitled The Gospel According To The Ghetto, and a personalised version of the Lord's Prayer.
When many Council members were arrested in the late 1960s, Banana and his family fled to the United States and did not return until 1975. Banana was arrested on his return but was released a year later, kept under house arrest, and then allowed to participate in Abel Muzorewa's plans for the country. However, he abandoned that effort and joined ZANU (led by Robert Mugabe), which was dedicated to overthrowing the Smith administration. Returning to Rhodesia in December 1976, Banana was arrested once more for his support of ZANU; upon the appointment of Christopher Soames as British governor, he was released from prison.
Under the country's new constitution Banana became the first president in 1980 and first black leader of Zimbabwe. In 1982 a law was passed forbidding citizens from making jokes about his name. In 1987 his largely ceremonial post was taken over by Mugabe, who made himself executive president. Banana then became a diplomat for the Organisation of African Unity and head of the religious department at the University of Zimbabwe. He played a large role in bringing the two major groups of independence fighters, ZANU and ZAPU, together to form the Zimbabwe African National Union - Patriotic Front, a merger that took place in 1988.
The former president's term in office was a subject of scandal in later years, marking his legacy to national independence social movements in Africa and abroad. In 1997, Banana was arrested in Zimbabwe on charges of sodomy, following accusations made during the murder trial of his former bodyguard, Jefta Dube.
The charges related to allegations from the state prosecutor that Banana had misused his power while he was president to coerce numerous men in positions of service (ranging from domestic staff to security guards, and even members of sports teams for whom he had acted as referee) into accepting sexual advances. Banana was found guilty of eleven charges of sodomy, attempted sodomy and indecent assault in 1998. He denied all charges, saying that homosexuality is "defiant, abominable and wrong", and the allegations made against him were "a mortuary of pathological lies" intended to destroy his political career.
Janet Banana later acknowledged her husband's indiscretions, even though she considered the charges against him to be politically motivated.
He fled to South Africa whilst released on bail before he could be imprisoned, apparently believing Mugabe was planning his death. He returned to Zimbabwe in December 1998, after a meeting with Nelson Mandela, who convinced him to face the ruling. Banana was sentenced on 18 January 1999 to ten years in jail, nine years suspended, and was also defrocked. He actually served six months in an open prison (being allowed to leave for shopping) before being released in January 2001.
Banana died of cancer, in London, according to a report delivered by the Zimbabwean High Commissioner. The Guardian Unlimited, a London-based newspaper, has claimed that Banana had traveled to South Africa, where he eventually died, in order to receive appropriate treatment for his cancer; however, this dispute relies upon uncorroborated testimonial evidence. He was buried in Zimbabwe in late November 2003.
President Robert Mugabe called him "a rare gift to the nation" in a radio address. Banana was buried without the full honours that are traditionally accorded to former heads of state. The then politburo Secretary for Information and Publicity Nathan Shamuyarira told state radio that "they (the politburo) could not accord Banana hero status as a matter of principle." His wife sought political asylum in Britain in October 2000 under a preexisting accord.