Gambon was born in Dublin during World War II. His father, Edward Gambon, was an engineer and his mother, Mary (née Hoare), was a seamstress. His father decided to seek work in the rebuilding of London, and so the family moved to Mornington Crescent in north London, when Gambon was five.

His father had him made a British citizen, a decision that would later allow Michael to receive an actual, rather than honorary, knighthood and CBE.

Raised a strict Catholic, he attended St Aloysius Boys' School in Somers Town and served at the altar. He then moved to St Aloysius' College in Hornsey Lane, Highgate, London, whose former pupils included Peter Sellers.

He later attended a school in Kent, before leaving with no qualifications at fifteen. He then gained an apprenticeship with Vickers Armstrong as a toolmaker. By the time he was 21 he was a fully qualified engineer. He kept the job for a further year, acquiring a fascination and passion for collecting antique guns, clocks and watches, as well as classic cars.

Aged 19 he joined the Unity Theatre in Kings Cross. Five years later he wrote a letter to Michael MacLiammoir, the Irish theatre impresario who ran Dublin's Gate Theatre. It was accompanied by a CV describing a rich and wholly imaginary theatre career, and he was taken on.

Gambon made his professional stage début in the Gaiety Theatre, Dublin's 1962 production of Othello, playing "Second Gentleman", followed by a European tour. A year later, cheekily auditioning with the opening soliloquy from Richard III, he caught the eye of star-maker Laurence Olivier who was recruiting promising spear-carriers for his new National Theatre Company.

Gambon, along with Robert Stephens, Derek Jacobi and Frank Finlay, was hired as one of the ‘to be renowned’ and played any number of small roles. The company initially performed at the Old Vic, their first production being Hamlet, directed by Olivier and starring Peter O'Toole. He played for four years in many NT productions, including named roles in The Recruiting Officer and The Royal Hunt of the Sun, working with directors William Gaskill and John Dexter.

He made his film debut in the Laurence Olivier Othello in 1965. He then played romantic leads, notably in the early 1970s BBC television series, The Borderers, in which he was swashbuckling Gavin Ker. As a result, Gambon was asked by James Bond producer Cubby Broccoli to audition for the role in 1970, to replace George Lazenby.

His craggy looks soon made him into a character actor, although he won critical acclaim as Galileo in John Dexter's production of The Life of Galileo by Brecht at the National Theatre in 1980. But it was not until Dennis Potter's The Singing Detective (1986) that he became a household name. After this success, for which he won a BAFTA, his work includes films such as The Cook, The Thief, His Wife and Her Lover which also starred Helen Mirren.

In 1992 he played a psychotic general in the Barry Levinson film Toys and he also starred as Georges Simenon's detective Inspector Jules Maigret in an ITV adaptation of Simenon's series of books. He starred as Fyodor Dostoyevsky in the Hungarian director Károly Makk's movie The Gambler (1997) about the writing of Dostoyevsky's novella The Gambler.