Carlyle was born in Maryhill, Glasgow, the son of Elizabeth, a bus company employee, and Joseph Carlyle, a painter and decorator. He was raised by his father after his mother left when he was four years old. Carlyle enrolled in acting class at the Glasgow Arts Centre at the age of 21.

Carlyle is a graduate of the Royal Scottish Academy of Music and Drama. In 1991, he and four friends founded an acting company and guest starred in The Bill. He first came to the attention of the public as murderer Albie Kinsella in an episode of Cracker opposite Robbie Coltrane (in which he killed the character, DCI David Bilborough, played by Christopher Eccleston). He soon landed the role of Highland policeman Hamish Macbeth in the eponymous BBC comedy-drama.

In 1996 and 1997, he appeared in what are arguably the two most high-profile roles of his career to date: that of the psychopathic Francis Begbie in Trainspotting and Gaz, the mild-mannered leader of a group of amateur male strippers, in The Full Monty.

Other memorable roles include the senior Malachy McCourt (father of author Frank McCourt) in the 1999 film adaptation of McCourt's first memoir, Angela’s Ashes, the villainous Renard in the James Bond film The World Is Not Enough, a cannibalistic soldier in Ravenous, the gay lover of Father Greg in Priest and Adolf Hitler in Hitler: The Rise of Evil.

Carlyle played the part of Don, one of the main characters in 28 Weeks Later. Most recently, he plays the lead role as a marine engineer, attempting to save London from total devastation in the disaster film Flood, released in 2007.

1997 saw Carlyle star with Ray Winstone in Face which was released finally in 2002 on DVD.