Harold Russell was born in North Sydney, Nova Scotia, Canada and moved to Massachusetts with his family in 1921, after his father's death in 1920.

In 1941, he was so profoundly affected by the December 7 attack on Pearl Harbor that he enlisted in the United States Army on the following day.

While he was an Army instructor, and training with the U.S. 13th Airborne Division at Camp Mackall, North Carolina, on June 6, 1944, a defective fuse detonated an explosive he was handling while making a training film. As a result, he lost both hands and was given two hooks to serve as hands. After his recovery, and while attending Boston University as a full-time student, Russell was featured in an Army film called Diary of a Sergeant about rehabilitating war veterans.

For his role as Parrish, Russell won the Academy Award for Best Supporting Actor in 1947. Earlier in the ceremony, he was awarded an honorary Oscar for "bringing hope and courage to his fellow veterans." The special award had been created because the Board of Governors very much wanted to salute Russell, a non-professional actor, but assumed he had little chance for a competitive win. It was the only time in Oscar history that the Academy has awarded two Oscars for the same performance.

Russell authored two autobiographies, Victory in My Hands (1949) and The Best Years of My Life (1981).

Russell became active in AMVETS, serving three terms as National Commander. As such, he wrote to President Truman in 1951, supporting his decision to dismiss General MacArthur. In his letter, Russell wrote: "The issue is whether the ultimate civil authority of the United States can tolerate actions in contempt of constitutional lines of authority. Any lessening of civil power over military power must inevitably lead away from democracy."

From the early 1960s to the late 1980s, Russell served as the Chairman of the President's Commission on Employment of the Handicapped, an unpaid position.

Russell appeared in only two other films after his debut, Inside Moves in 1980 and Dogtown in 1997. He also appeared in an episode of Trapper John, M.D. in 1981 and a two-part episode of the television series China Beach in 1989.

In 1992, in a controversial decision, Russell consigned his Oscar for Best Supporting Actor to Herman Darvick Autograph Auctions, and on August 6, 1992, in New York City, the Oscar sold to a private collector for $60,500 ($105,500 today). Claiming he needed money for his wife's medical expenses, Russell defended his action, saying, "I don't know why anybody would be critical. My wife's health is much more important than sentimental reasons. The movie will be here, even if Oscar isn't." However, the Academy of Motion Picture Arts and Sciences, which objects to the selling of its awards, disputed that motivation, stating that in actuality his new wife merely "wanted to take a cruise". The Academy has required all Oscar recipients since 1950 to sign an agreement forbidding them from selling their award; as a pre-1950 winner, Russell was exempt from this provision.

Russell died of a heart attack on January 29, 2002, 15 days after his 88th birthday, and is buried in Lakeview Cemetery in Wayland, Massachusetts.