He was born 'Iolani Liholiho in Hilo, Hawai‘i, the eldest son of Kamehameha I and his highest-ranking wife Keopuolani, he was groomed to be heir to the throne from age five. He was put in the care of Kaahumanu who was appointed as the LIholiho's official guardian. He was trained to become as warrior like his father which later prove useful.

Liholiho was to succeed to the throne upon Kamehameha I's death in May 1819 Queen Kaahumanu prepared for young Liholiho's appearance as King. She had no intention to give him leadership. When Liholiho sailed toward the shores of Kailua Kona (the capital at the time), she greeted him wearing Kamehameha's royal red cape, and she annouce to the people on shore and to the surprised Liholiho, "We two shall rule the land." Liholiho, young and inexperienced, had no other choice. Kaahumanu became the first kuhina nui (co-leader) of Hawaii. He was forced to take on merely a ceremonial role; administrative power was to be vested in Ka‘ahumanu.

Kamehameha II is best remembered for the 'Ai Noa, the breaking of the ancient kapu (taboo) system of religious laws six months into his reign when he sat down with Kaahumanu and his mother Keopuolani and ate a meal. It was also during his reign that the first Christian missionaries arrived in the Hawaiian Islands. Even though he never fully converted to Christianity his breaking of the kapu helped the missionaries to take a hold on the fate of Hawaii.

He (like his father Kamehameha) married many woman of high rank. Everyone of them were his relatives. His favorite wife was his half-sister Victoria Kamamalu Kekuaiwaokalani. Elizabeth Kinau (Kamamalu's full-blood sister) was his other wife who would later remarry and become Kuhina Nui. Princess Kalanipauahi was his niece by his half-brother Pauli and would later remarried and give birth to Princess Ruth Keelikolani. High Chieftess Miriam Auhea Kekaulohi (Kaahumanu III) who was the half sister of Kamamalu and Kinau through their mother Kalakua Kaheiheimaile, and she was his one of his father's wife. Princess Anna Keahikuni-i-Kekauonohi who was Liholiho's niece and grandaughter of Kamehameha I and would later become Governor of the island of Maui.