Zanuck was born in Wahoo, Nebraska, the son of Louise (née Torpin) and Frank Zanuck, who owned and operated a hotel in Wahoo. Zanuck was of part Swiss descent and was raised a Protestant. At age six, Zanuck and his mother moved to Los Angeles, where the better climate could improve her poor health. At age eight, he found his first movie job as an extra, but his disapproving father recalled him to Nebraska. In 1917, despite being fifteen, he deceived a recruiter, joined the United States Army, and served in France with the Nebraska National Guard during World War I.

Upon returning to the US, he worked in many part-time jobs while seeking work as a Writer. He found work producing movie plots, and sold his first story in 1922 to william Russell and his second to Irving Thalberg. Screenwriter Frederica Sagor Maas, story Editor at Universal Pictures' New York office, stated that one of the stories Zanuck sent out to movie studios around this time was completely plagiarized from another author's work.

Zanuck then worked for Mack Sennett and FBO (where he wrote the serials The Telephone Girl and The Leather Pushers) and took that experience to Warner Bros, where he wrote stories for Rin Tin Tin and under a number of pseudonyms wrote over forty scripts from 1924 to 1929, including Red Hot Tires (1925) and Old San Francisco (1927). He moved into management in 1929, and became head of production in 1931.

Haunted by his part in creating the racist Ham and Eggs at the Front (1927), Zanuck began tackling serious issues, breaking new ground by producing some of Hollywood's most important and controversial films. Long before it was fashionable to do so, Zanuck addressed issues such as racism (Pinky), anti-Semitism (Gentleman's Agreement), poverty (The Grapes of Wrath, Tobacco Road), unfair unionization and destruction of the environment (How Green Was My Valley), and institutionalized mistreatment of the mentally ill (The Snake Pit). After The Snake Pit (1949) was released, thirteen states changed their laws. For his contributions to the motion picture industry, Zanuck earned three Irving G. Thalberg Awards from the Academy of Motion Picture Arts and Sciences; after Zanuck's third win, the rules were changed to limit one Thalberg Award to one person. 20th Century Fox, the studio he co-founded and ran successfully for so many years, screens movies in its Darryl F. Zanuck Theater.

In 1933, Zanuck left Warners over a salary dispute with studio head Jack L. Warner. A few days later, he partnered with Joseph Schenck to form 20th Century Pictures, Inc. with financial help from Joseph's brother Nicholas Schenck and Louis B. Mayer, President and studio head of Loew's, Inc and its subsidiary Metro-Goldwyn-Mayer, along with william Goetz and Raymond Griffith. 20th Century released its material through United Artists. During that short time (1933–1935), 20th Century became the most successful independent movie studio of its time, breaking box-office records with 18 of its 19 films, all in profitability, including Clive of India, Les Miserables and The House of Rothschild. After a dispute with United Artists over stock ownership, Schenck and Zanuck negotiated and bought out the bankrupt Fox studios in 1935 to form Twentieth Century-Fox Film Corporation. Zanuck was Vice President of Production of this new studio and took a hands-on approach, closely involving himself in scripts, film editing and producing.

Zanuck's tenure in the 1940s and 50s resonated with his astute choices. He first personally rescued a cumbersome cut of The Song Of Bernadette (1943), recutting the completed film into a surprise hit that made a star of newcomer Jennifer Jones who won the Oscar. He relented to actor Otto Preminger's fervent wish to direct a modest thriller called Laura (1944), putting Clifton Webb in his Oscar-nominated role as Gene Tierney's controlling mentor, with David Raksin's haunting score.

When the U.S. entered World War II at the end of 1941, he was commissioned as a Colonel in the Army Signal Corps, but was frustrated to find himself posted to the Astoria studios in Queens, Long Island and, even worse, serving alongside the spoiled son of Universal's founder, Carl Laemmle Jr., who was chauffeured by limousine to Long Island each morning from a luxury Manhattan hotel.

Zanuck was an early advocate of widescreen projection. One of the first things Zanuck did when he returned to Fox in 1944 was to restart the research on a 50mm film, shelved in the early 1930s as a cost-cutting measure (a larger-sized film in the projector meant higher resolution). Impressed by a screening in Cinerama, a three-projector widescreen process, unveiled in 1952 that promised to envelop the viewer in a wrap-around image, Zanuck wrote an essay extolling widescreen's virtues, seeing the new formats as a "participatory" form of recreation, rather than mere passive entertainment, such as television. But Cinerama was cumbersome, and used three projectors simultaneously, potentially a hugely expensive investment. Fox, like every other studio had rejected Cinerama when the innovative new process was pitched to them for investment. In retrospect, this looked like a mistake, but nothing could be done. Cinerama was no longer for sale.

Leading theater Director Elia Kazan was carefully nurtured through his first film, A Tree Grows in Brooklyn (1945), based on a popular novel. It did so well he chose Kazan to direct the first studio film on anti-Semitism, Gentleman's Agreement (1947), with Gregory Peck playing a Gentile reporter whose life falls apart due to implacable anti-Semitism emerging from friends and family when he pretends to be Jewish for an exposé. More Oscars for Best Actor and Best Picture. After Kazan triumphed in Tennessee Williams' Broadway hit, A Streetcar Named Desire, he brought Kazan back to direct Pinky (1949), another film about prejudice, this time racial.

As television began to erode Hollywood's audiences in the early 1950s, widescreen presentation was thought to be a potential solution. The 1950 television set duplicated the near-square shape of the 35 mm format in which all movies were shot — and this was no accident. Standardization of film size meant all theaters everywhere could play all films. Rather unbelievably, even the projection of film formats—i.e. any attempt to break out of the 35mm format—were under the control of the Hays Office, which limited any wide-screen experiments to the ten largest cities in America. This severely limited the Future of any widescreen format.

Of the other studios, MGM had immediately abandoned its own attempts and committed to CinemaScope and United Artists and Walt Disney Productions announced they would make films in the same widescreen process. But the other studios hesitated, and some announced their own rival systems: Paramount's VistaVision, which would prove a worthy rival, Warner Brother's WarnerScope which vanished overnight. The November 3, 1953 premiere of The Robe brought Warner Bros. and Columbia around, though Warner's plan was a full slate of 3-D features for 1954 instead. Zanuck began to make compromises, and eventually capitulate. Smaller theaters rented conventional versions of the studio's films; stereo they could live without altogether. Todd-AO came out in 1955, and after its developer, Mike Todd, died in 1958, Zanuck invested in the process for Fox's most exclusive roadshows. Although pictures continued to be shot in CinemaScope until 1967, it ironically became relegated to Fox's conventional releases.

Nonetheless, the Battle of the Screens seemed to leave Zanuck emotionally exhausted. He began an affair with a young Polish woman, who was actually a guest of his wife, changing her name to Bella Darvi. When he cast Darvi in The Egyptian (1954), she was so mediocre and the script so unsatisfactory, that star Marlon Brando walked off the picture after the first read-through. He agreed to give Fox two other pictures rather than return. Her unintelligible accent helped sink not only the ponderous film, but his long-enduring marriage, and indeed his life at the studio itself.

In 1956, Zanuck withdrew from the studio and left his wife, Virginia Fox, to move to Europe and concentrate on independent producing with a generous contract from Fox that gave him directing and casting control on any projects Fox financed. Eventually, in his absence, Fox began to fall to pieces thanks to the ballooning budget of Cleopatra (1963), whose entire set built at Pinewood Studios had to be scrapped before shooting even started.

On February 8, 1960, Zanuck received a star on the Hollywood Walk of Fame, for his contribution to the motion picture industry, at 6336 Hollywood Blvd.

Fearing the studio's profligacy would sink his cherished The Longest Day (1962) as it readied for release, Zanuck returned to control Fox. He replaced Spyros Skouras as President, who'd failed to control perilous cost overruns on the still-unfinished Cleopatra (1963) and had been forced to shelve Marilyn Monroe's last vehicle, Something's Got To Give after principal photography had started, at a loss of $2 million. Zanuck promptly made his son, Richard D. Zanuck, head of production.

As the tumultuous decade wore on, Richard also began to falter with lavish costume musicals that expensively tanked: Rex Harrison as the man who could talk to the animals in Doctor Dolittle (1967), Julie Andrews in the period film Star! (1968), and Barbra Streisand in Hello Dolly (1969).

At the end of 1970, Zanuck hurriedly assembled the board the day before New Year's. Zanuck denounced his son's incompetence in front of the entire board and summarily fired him. Richard, stunned and humiliated, flew back to LA on New Year's Day; a studio guard stood watch at his office; it was left to his secretary to tell him he had until six PM to be off the lot.

A long-time cigar smoker, he died of pneumonia in 1979, aged 77. He is interred at the Westwood Village Memorial Park Cemetery, near his wife, Virginia Fox in Westwood, Los Angeles, California.

Appalled by such privileged cosseting, Zanuck stormed down to Washington, D.C. and into the War Department, demanding a riskier assignment from Chief of Staff, General George C. Marshall. Since American forces were not yet fighting anywhere, Marshall had Zanuck posted to London as chief U.S. liaison officer to the British Army film unit, where at least he would be studying army training films while under Nazi bombardment by Hitler's Luftwaffe in the still-ongoing Blitz. Zanuck cheerfully endured the bombs, refusing to leave his room at Claridge's for its air-raid shelter during nightly raids and instead hosting 'blitz parties" because he had such a splendid view of anti-aircraft fire from his hotel room, not to mention coveted PX food and drink long missing from Britain's highly rationed shelves. He even persuaded Lord Mountbatten to allow him along on a secret coastal raid across the Channel to occupied France. The daring nighttime attack on a German radar site was a success. Zanuck, ever the showman, sent his wife in Santa Monica a package of "Nazi-occupied sand", writing her "I've just been swimming on an enemy beach" – not allowed, of course, to tell her where he'd been, let alone that they'd been under Nazi gunfire and helped the wounded back to the ship.

"Hollywood Producer Darryl F. Zanuck was legendary in the industry — but not just for the movies he made. Zanuck worked his way through actresses on the sofa in his office faster than the credits rolled on his flicks", according to the tome The Zanucks of Hollywood: The Dark Legacy of an American Dynasty by Marlys Harris. His daily bedding of budding starlets operated like clockwork. At 4 p.m. every day, his Fox Century City studio would shut down while Zanuck shuttled a young woman through a subterranean passage to his green-paneled office, according to Harris and Deadline Hollywood. “Anyone at the studio knew of the afternoon trysts,” Harris wrote. “He was not serious about any of the women. To him they were merely pleasurable breaks in the day — like polo, lunch and practical jokes.” In 1937, Zanuck won the Academy of Motion Picture Arts and Sciences’ first prestigious Thalberg award for producing. It was the same decade that Variety first used the now-ubiquitous term for the abuse of power that Zanuck and other Hollywood execs were perpetuating behind the scenes — “the casting couch,” according to Slate. Years later, in 1975, Newsweek would do a story titled “The Casting Couch” in which it quoted the words on a plaque above the couch in the office of a Tinseltown Producer in the 1950s: “Don’t forget, darling, tomorrow you’re going to be a star.”"