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Jan Terlouw was born in Kamperveen, Overijssel. He was the eldest son in his family, he has two brothers and two sisters and grew up in the Veluwe. After high school, Terlouw studied at Utrecht University were he obtained an MSc degree in mathematics and physics and a PhD degree in nuclear physics. After graduating, he worked as a physics researcher in the Netherlands, the United States, and Sweden. After working for thirteen years, he became a politician, joining the Dutch House of Representatives (the lower house of the Dutch legislature) as a member of the Democraten 66 political party in 1967. Terlouw acted as party leader from 1973-1982. He was minister of Economic Affairs from 1981 to 1982 and Commissar of the Queen of Gelderland from 1991 to 1996, the year in which he retired. He joined the Dutch Senate in 1999.
Terlouw also wrote 24 children's books, most notably Winter in Wartime (Oorlogswinter, 1972) and How to Become King (Koning van Katoren, 1971), both of which won the Gouden Griffel and have been made into motion pictures directed by Martin Koolhoven.