Villiers was born in London, the son of Wing commander David Hugh Villiers (1921–1962) by his second wife, Elizabeth Barbara (née Hobbins). He is a descendant of the Right Reverend Henry Montagu Villiers, Bishop of Durham from 1860-61, brother of George Villiers, 4th Earl of Clarendon, and Charles Pelham Villiers. He is the brother of Cat Villiers, a film Producer, and Jay Villiers, also an actor. Through Henry Montagu Villiers' mother, the brothers descend from Oliver Cromwell. He was educated at Stowe School.

In 1983, he starred in Sweet Sixteen with Penelope Keith. In 1996 he had a significant role in Sharpe's Siege. He has also appeared in an episode of Adventure Inc. when filming transferred to the UK for four episodes.

In 1995, Villiers co-founded 2020 Casting, Ltd., one of the largest film background (extras) agencies in the country. Company credits include: Gladiator, Bridget Jones's Diary, Shakespeare in Love, Star Wars, United 93. He appeared in two episodes of Midsomer Murders ("The Killings at Badger's Drift" and "Death's Shadow"). In 2007, he guest-starred in the Doctor Who audio drama Absolution (having previously appeared in the TV two-part serial The King's Demons, back in 1983). In 2009 he was seen in the five-part drama series Collision for ITV. In 2013 he appeared in the Father Brown episode "The Blue Cross" as Justin De Vey. He appeared in By Any Means. In 2014, Villiers returned to Doctor Who when he guest starred as Professor Moorhouse in the story Mummy on the Orient Express.

Villiers may be best known for his former role on Emmerdale, in which he played Grayson Sinclair. He played Captain Nigel Croker in Mile High (2004-05) and appeared in such films as The Scarlet Pimpernel (1982), Top Secret! (1984), A Hazard of Hearts (1987) and First Knight (1995). In 2003 he co-wrote (with actor/playwright/producer Richard Everett) and co-produced (again, with Everett) the critically well-received British feature film, Two Men Went to War (2002). He also continued to appear in films such as Sliding Doors (1998), Bloody Sunday (2002), Kidulthood (2006) and Land Gold Women (2011).

On 29 March 2008, ITV released a statement saying Villiers would be written out of Emmerdale as Grayson Sinclair in a summer storyline. Upon the termination of his contract, Villiers stated; "Grayson has been a great character to play but we’ve agreed that the current storyline is going to provide an exciting exit for him. I've got several projects that I'm looking at but you never know, this might not be the last we see of Gray."