As a young man, Dreyer worked as a Journalist, but he eventually joined the film industry as a Writer of title cards for silent films and subsequently of screenplays. He was initially hired by Nordisk Film in 1913.

His first attempts at film direction had limited success, and he left Denmark to work in the French film industry. While living in France he met Jean Cocteau, Jean Hugo and other members of the French artistic scene and in 1928 he made his first classic film, The Passion of Joan of Arc. Working from the transcripts of Joan's trial, he created a masterpiece of emotion that drew equally on realism and expressionism. Dreyer used private Finance from Baron Nicolas de Gunzburg to make his next film as the Danish film industry was in financial ruin. Vampyr (1932) is a surreal meditation on fear. Logic gave way to mood and atmosphere in this story of a man protecting two sisters from a vampire. The movie contains many indelible images, such as the hero, played by de Gunzburg (under the screen name Julian West), dreaming of his own burial and the animal blood lust on the face of one of the sisters as she suffers under the vampire's spell. The film was shot mostly silent but with sparse, cryptic dialogue in three separate versions – English, French and German.

Both films were box office failures, and Dreyer did not make another movie until 1943. Denmark was by now under Nazi occupation, and his Day of Wrath had as its theme the paranoia surrounding witch hunts in the seventeenth century in a strongly theocratic culture. With this work, Dreyer established the style that would mark his sound films: careful compositions, stark monochrome cinematography, and very long takes. In the more than a decade before his next full-length feature film, Dreyer made two documentaries. In 1955, he made Ordet (The Word) based on the play of the same name by Kaj Munk. The film combines a love story with a conflict of faith. Dreyer's last film was 1964's Gertrud. Although seen by some as a lesser film than its predecessors, it is a fitting close to Dreyer's career, as it deals with a woman who, through the tribulations of her life, never expresses regret for her choices.

The great, never finished project of Dreyer's career was a film about Jesus. Though a manuscript was written (published 1968) the unstable economic conditions and Dreyer's own demands of realism together with his switching engagement let it remain a dream.