Fan Li hailed from Yuan 宛 (today's Nanyang 南陽, Henan) in the state of Chu 楚 and was a disciple of Ji Ran 計然, also known as Jiranzi 計然子 (see Wenzi 文子). He then decided to accompany Wen Zhong 文種 to offer their services to King Goujian 句踐 (r. 495- 465). He spent some time in Wu 吳 as a hostage from the defeated kingdom of Yue. After he returned to Yue, he advised King Goujian in strengthening his kingdom and to built up a new army. He thus contributed to the final victory of Yue over Wu in the battle of Lize 笠澤 in 478 BCE.
Although he was bestowed the title of supreme commander, he left Yue with a small boat (pianzhou 扁舟) and started a private life as a peasant in the state of Qi 齊, where he called himself Zhiyi Zipi 鴟夷子皮. The duke of Qi made him his Counsellor-in-chief, but Fan Li soon returned his official seal, spent all his fortune and wandered around before settling down in Tao 陶 (modern Dingtao 定陶, Shandong). He adopted the name Tao Zhugong 陶朱公 and engaged in trade and again accumulated an immense fortune. Because of his mercantile activities, Li Fan's biography is found in the chapter "Profiteers" (129 Huozhi liezhuan 貨殖列傳) in the univeral history Shiji 史記.
Fan Li was a diligent observer of agriculture and the long-term impact of wheater on grain prices. He was the first counsellor who recommended to adjust grain prices (pingtiao 平糶, see price regulation of grain) by storing grain in granaries. Such a measure was in his eyes the central "way of governing a country" (zhi guo zhi dao 治國之道). He also brought forward methods for building up or exchanging stocks by planning in an anti-cyclical way: invest in boats in times of draught, and in carts in times of flood (han ze zi zhou, shui ze zi che 旱則資舟，水則資車). An intelligent merchant would buy when prices were low, and sell when prices soared. A market economy would furthermore be in need of cash, "to flow like water" (xing ru liu shui 行如流水). Fan Li was thus an advocate of monetization.
In popular belief, Tao Zhugong is venerated as the "god of trade" (maoyishen 貿易神) and the ancestral deity of potters (taoye zushi 陶業祖師). The annual sacrifices to Tao Zhugong are carried out twice, in the mid of the 3rd and the mid of the 10th lunar months. In Shaoxing 紹興, Zhejiang, offerings are presented on the 11th day of the 5th lunar month.
A two-chapters long book called Li Fan 范蠡 mentioned in the bibliographic chapter Yiwen zhi 藝文志 of the official dynastic history Hanshu 漢書 is lost. Some authors argue that Jiran 計然 was the name of a book written by Fan Li, and not a different person. Apart from these texts, some books on agriculture were believed to be products of Fan Li, namely Tao Zhugong zhifu qishu 陶朱公致富奇書 "Tao Zhugong's marvellous book on acquiring wealth" and Tao Zhu Gong yangyu jing 陶朱公養魚經 "Tao Zhugong's book on fish breeding".
The scholar Meng Wentong 蒙文通 (1894-1968), author of a collection of studies on the history of the state of Yue, Yueshi congkao 越史叢考, demonstrated that Li Fan and Zhiyi Zipi were in fact two different persons.