Carey was born in the Saugus neighborhood of Santa Clarita, California, the son of actor Harry Carey (1878–1947) and Actress Olive Carey (1896–1988). As a child, he learned to speak Navajo. His maternal grandfather was vaudeville entertainer George Fuller Golden. As a boy, he was nicknamed "Dobe", short for adobe, because of the color of his hair. He grew up on his parents' ranch in Santa Clarita; they had horses and cattle. His family ranch was later turned into a historic park by the Los Angeles County and was named Tesoro Adobe Park.

He married Marilyn Fix, daughter of actor Paul Fix, in 1944. The couple went on to have four children.

After leaving the Navy, Carey attempted a singing career to avoid acting but was unsuccessful. He began acting in the John Ford Stock Company with his father. Carey collaborated frequently with Director John Ford, who was a close friend. He appeared in such notable Ford films as 3 Godfathers (1948), She Wore a Yellow Ribbon (1949), The Searchers (1956), and Cheyenne Autumn (1964). Both of his parents had appearances in Ford's films as well. He became a respected character actor like his father. Carey appeared in many Westerns. He made four films with Director Howard Hawks. The first was Red River, which featured both Carey and his father in separate scenes, followed by Monkey Business, Gentlemen Prefer Blondes, and Rio Bravo. Carey is credited in Rio Bravo, but his scenes were cut. Carey speculated that Hawks either did not like Carey's outfit or cut the scene because Carey addressed Hawks as "Howard" instead of "Mr. Hawks".

On April 29, 1962, Carey was cast as Mitch Evers in the episode "Cort" of the ABC-WB Western series, Lawman, with John Russell and Peter Brown. In the story line, Cort Evers (Kevin Hagen), who is much younger than he appears, seeks revenge against his brother Mitch, whom he mistakenly blames for betraying six Union Army prisoners from their hometown during the American Civil War. Mitch is compelled to confront Cort in a shootout during which he explains that it had been Cort himself, under the influence of a fever, who betrayed the prisoners. Cort faints to the ground as he remembers the startling truth of his brother's words.

In 1980, Carey portrayed George Arthur in the movie The Long Riders, a film about the exploits of Jesse James. In 1985, Carey played the aging biker Red in the movie Mask. In 1987, Carey was a featured actor in the film, The Whales of August, with Bette Davis, Lillian Gish, Vincent Price, and Ann Sothern. In this film, Carey portrayed a good-natured and noisy handyman and delivered his lines in a perfect Maine accent. In 1990, Carey appeared in the film Back to the Future Part III in a saloon scene set in 1885. In 1993, he made a cameo in the film Tombstone as Marshal Fred White.

Carey wrote an autobiography of his life titled Company of Heroes: My Life as an Actor in the John Ford Stock Company, which was published in 1996.

Carey also collaborated with John Wayne with whom he made nine films. He got to work with Wayne first in Red River and last in Cahill U.S. Marshal. He also starred in nine films alongside Ben Johnson including Rio Grande and Cherry 2000. Between 1955 and 1957, Carey appeared as ranch counselor Bill Burnett in the serial Spin and Marty, seen on Walt Disney's Mickey Mouse Club. A DVD version of The Adventures of Spin & Marty was released in December 2005 as part of the Walt Disney Treasures series. Carey was interviewed by Leonard Maltin on the 50th anniversary of the series' debut as a DVD bonus feature. In the 1960s, Carey appeared on such western series as Have Gun - Will Travel and The Legend of Jesse James.

Carey appeared in Tales from the Set, a series of video interviews in which he discussed various individuals with whom he worked. The series debuted in France at the Epona Festival, an event devoted to horses, in October 2007. In 2009, Carey and his partner Clyde Lucas completed Trader Horn: The Journey Back, a remembrance of the 1931 adventure film featuring the elder Carey. Carey attempted to produce a feature film called Comanche Stallion, a project which John Ford had considered making in the early 1960s, based on the 1958 book by Tom Millstead.

Carey died of natural causes in a hospice on Thursday, December 27, 2012, in Santa Barbara at the age of 91. His ashes are interred at Westwood Village Memorial Park Cemetery. Survivors included his wife, the former Actress Marilyn Frances Fix Carey (died 4/25/2017); a son, Thomas; two daughters, Melinda and Patricia; and three grandchildren. He was preceded in death by a son Steven Carey, who died in 1989. At the time of his death, he was reported to be the last living member of the John Ford Stock Company, though in reality John Wayne's son Patrick Wayne survived him.

During World War II, Carey Jr. served in the United States Navy as a Pharmacist Mate 2nd Class (medical corpsman) in the Pacific War. However, he was transferred back to the United States (against his wishes) to serve with his father’s good friend the Director John Ford in a Naval photographic unit attached to the Office of Strategic Services. He then helped to make training films for the Navy and the OSS.