Neill was born Nigel John Dermot Neill, the second son of Dermot Neill, a Harrow and Sandhurst-educated army officer and third generation New Zealander, and his English wife, Priscilla. At the time of Neill's birth, his father was stationed in Northern Ireland, serving with the Irish Guards. The family were the owners of Neill and Co., the largest liquor retailers in New Zealand.

Neill returned with his family to New Zealand in 1954, where he attended the Anglican boys' boarding school Christ's College, in Christchurch. He then went on to study English literature at the University of Canterbury, where he got his first exposure to acting.

While at Canterbury University he resided at College House, where he held the position of Chief Castigator and Crime Crusher (CCACC). He then moved to Wellington to continue his tertiary education at the Victoria University, from which he graduated with a Bachelor of Arts in English Literature.

He first took to calling himself "Sam", in school in New Zealand where there were other Nigels, and the phrases "a real Nigel" and "Nigel No-mates" were commonly used to refer to a sad loner.

After working at the New Zealand National Film Unit as a director and actor, Neill was cast as the lead in the New Zealand film Sleeping Dogs. Following this he appeared in the Australian classic, My Brilliant Career (1979), opposite Judy Davis. This appearance led to his being selected to play Damien Thorn in Omen III: The Final Conflict in 1981, one of the sequels to The Omen. In the late-1970s his mentor was the notable British actor James Mason.

After Roger Moore made his last James Bond movie in 1985, Neill was seriously considered for the role in The Living Daylights. He impressed people with his screen test and was the preferred choice of director John Glen. However, Cubby Broccoli was not as impressed by Neill, and the role eventually went to Timothy Dalton instead.

Since then, Neill has played heroes and villains in a succession of film and television dramas and comedies. In the UK, he became well-known in the early-1980s, starring in dramas such as Ivanhoe and notably in the title role of Reilly, Ace of Spies.

Neill is known for his leading and co-starring roles in major films including Dead Calm (1989), La révolution française (1989) playing the famous Lafayette, The Hunt for Red October (1990), Memoirs of an Invisible Man (1992), The Piano (1993), Jurassic Park (1993), Sirens (1994), Event Horizon (1997), The Dish (2000), and Jurassic Park 3 (2001). In Hunt for Red October, Neill uttered the film's most memorable line: "I would like to have seen Montana," as the dying Vasily Borodin.

The film Cinema of Unease: A Personal Journey by Sam Neill (1995) was written and directed by Sam Neill and Judy Rymer. In it Neill narrated his personal recollection of New Zealand film history. Neill was asked to play the role of Elrond in The Lord of the Rings by Peter Jackson, but turned it down because of his contractual obligations to another film, namely, Jurassic Park III (2001). He hosted and narrated a series of 2002 documentaries for BBC entitled Space (Hyperspace in the United States).

In 2006, Neill also lent his voice to a series of radio ads for Fifth Third Bank in the midwestern U.S.

Neil also appeared in Merlin (1998), a film based on the legend of King Arthur and the Lady of the Lake, portraying the legendary wizard. He also reprised his role as Merlin in the film's not-so-well received sequel, Merlin's Apprentice (2006), in which Merlin learns he fathered a son with the Lady of the Lake.

He is currently starring in the historical drama The Tudors, playing Cardinal Wolsey, on the Showtime Network. "I have to say I really enjoyed making The Tudors", Neill said. “It was six months with a character that I found immensely intriguing, with a cast that I liked very much and with a story I found very compelling. It has elements that are hard to beat — revenge and betrayal, lust and treason, all the things that make for good stories."