Donlevy was born in 1901 in Cleveland, Ohio, to Irish parents Rebecca (née Parks) and Thomas Donlevy, who were originally from Portadown, County Armagh. Sometime between 1910 and 1912, the family moved to Sheboygan Falls, Wisconsin, where Donlevy's father worked as a supervisor at the Brickner Woolen Mills.

When the local Army National Guard company was called into Service for the Pancho Villa Expedition in 1916, Donlevy lied about his age (he was actually 14) so he could join the mobilization. Donlevy served during the expedition as a bugler. When the United States entered World War I, Donlevy went to France with Company C, 127th Infantry Regiment, a part of the 32nd Infantry Division.

Donlevy began his career in New York City in the early 1920s, appearing in many theater productions and also winning an increasing number of silent film parts. Previously, he had modeled for the Illustrator J. C. Leyendecker, who produced illustrations for the famous Arrow Collar advertisements. His Broadway credits included Hit the Deck and Life Begins at 8:40.

Donlevy was married to Yvonne Grey from 1928 to 1936. He married Actress Marjorie Lane in 1936. They had one child together and divorced in 1947. Donlevy was married to Lillian Arch Lugosi (the former wife of Bela Lugosi) from 1966 until his death in 1972.

Donlevy's break came in 1935, when he was cast in the Edward G. Robinson film Barbary Coast. A large amount of film work followed, with several important parts. In 1939, he played the lead villain in Destry Rides Again and was nominated for an Academy Award for Best Supporting Actor for his memorable role as the ruthless Sergeant Markoff in Beau Geste, although the Oscar went to Thomas Mitchell for Stagecoach.

Donlevy starred as US special agent Steve Mitchell in the radio/TV series Dangerous Assignment. Mitchell received assignments to exotic locales involving international intrigue from the Commissioner played by Herbert Butterfield. His obituary in The Times newspaper in the United Kingdom stated that "any consideration of the American 'film noir' of the 1940s would be incomplete without him".

The following year, he played the role for which he is perhaps best remembered, that of McGinty in The Great McGinty, a role he reprised four years later in The Miracle of Morgan's Creek. In 1942, Donlevy starred in Wake Island with william Bendix and Robert Preston and played street-tough borough Politician Paul Madvig in Dashiell Hammet's classic The Glass Key. In 1955, he played the lead in the British science-fiction horror film The Quatermass Xperiment (called The Creeping Unknown in the US) for the Hammer Films company, playing the lead role of Professor Bernard Quatermass. The film was based on a 1953 BBC Television serial of the same name.

Throughout his film career, Donlevy also did several radio shows, including a reprise of The Great McGinty. He played the lead character in Dangerous Assignment between 1949 and 1954, taking the series to TV in 1952. He featured in a number of films over the following years until his death. He also appeared in a variety of television series from the late 1940s until the mid-1960s. In 1966 in one of the final episodes of Perry Mason, "The Case of the Positive Negative", Donlevy played defendant General Roger Brandon.

He also guest-starred on such popular programs as Crossroads, Wagon Train, and Rawhide. In 1957, he appeared in a CBS production of A. J. Cronin's Beyond This Place. In 1960, he appeared as John Ridges in the episode "Escape" of The DuPont Show with June Allyson. His last film role was in Pit Stop, released in 1969.

Donlevy died from throat cancer on April 6, 1972 at the Motion Picture Country Hospital in Woodland Hills, Los Angeles, California. He was survived by his wife and a daughter, Judy Donlevy, by his second wife. His ashes were scattered over Santa Monica Bay.

In December 2016, a biography, Brian Donlevy, the Good Bad Guy by Derek Sculthorpe was published by McFarland & Company of North Carolina.