Mason was born in Huddersfield, Yorkshire, to John and Mabel Mason; his father was a wealthy merchant. Mason had no formal training as an actor and initially embarked upon it as a lark. He was educated at Marlborough College, and then studied architecture at Peterhouse, Cambridge, where he gained a first degree, but became involved in stock theatre companies in his spare time, before joining the Old Vic theatre in London under the guidance of Tyrone Guthrie and Alexander Korda, who gave Mason a small film role in 1933 but fired him a few days into shooting.

From 1935 to 1948 he starred in many British quota quickies. A conscientious objector during World War II (something which caused his family to break with him for many years), he became immensely popular for his brooding anti-heroes in the Gainsborough series of melodramas of the 1940s, including The Man in Grey and The Wicked Lady.

He also starred with Deborah Kerr and Robert Newton in 1942's Hatter's Castle. Mason starred in the critically acclaimed and immensely popular The Seventh Veil that set box office records in postwar Britain and catapulted him to international film stardom. In 1949, he made his first Hollywood film, Caught, and then went on to star in many more feature films and early TV shows. Nominated three times for an Oscar, he never won one.

Mason's distinctive voice enabled him to play a menacing villain as greatly as his good looks assisted him as a leading man. His roles include the declining actor in the 1954 version of A Star Is Born, a mortally wounded Irish revolutionary in Odd Man Out, Brutus in Julius Caesar, General Erwin Rommel twice, in The Desert Fox: The Story of Rommel, and in The Desert Rats, Captain Nemo in 20,000 Leagues Under the Sea, a small town school teacher driven insane by the effects of Cortisone in Bigger Than Life, a suave master spy in North by Northwest, a determined explorer in Journey to the Centre of the Earth, Humbert Humbert in Stanley Kubrick's Lolita, a hired assassin sent to kill Peter O'Toole and thereby prevent him from leading a peasant uprising in Lord Jim, the vampire's servant, Richard Straker, in Salem's Lot, and a surreal pirate-ship captain in Yellowbeard. One of his last roles, that of corrupt lawyer James Concannon in The Verdict, earned him his third and final Oscar nomination.

Mason was once considered to play James Bond in a 1958 TV adaptation of From Russia with Love, which was ultimately never produced. Despite being in his fifties, he was still under consideration to play Bond in Dr. No before Sean Connery was cast.

He was also approached to appear as Bond villain Hugo Drax in Moonraker, however, he turned this down despite his renowned tendency to take any job offered him – which led to appearances in films such as The Yin and the Yang of Mr. Go, Bloodline and Hunt the Man Down.

Throughout his career, Mason remained a powerful figure in the industry and he is now regarded as one of the finest film actors of the 20th century.

In the late 1970s, Mason became a mentor to up-and-coming actor Sam Neill.

Late in life, he served as narrator for a British television series on the films of Charlie Chaplin, Unknown Chaplin, which was aired in the U.S. on PBS and later issued on home video.