He first became involved in the film industry in the late 1980s, acting as production Runner or production assistant in a number of small Australian films. In 1991 his role became assistant Director, being the third assistant Director in another Australian film, The Girl Who Came Late.

McTeigue broke into mainstream Hollywood in 1994 as the second assistant Director for No Escape and the big budget film Street Fighter. In 1996 McTeigue again acted as second assistant Director on an American television film and a small Australian film being completed that year.

In 1997 he was the second assistant Director for the WWII film Paradise Road as well as The Well, that year he also worked as first assistant Director for the television series Big Sky. The following year he was the second assistant Director for the American science-fiction film Dark City as well as the Australian film The Sugar Factory.

In 1999 McTeigue was intended to act as second assistant Director for The Matrix film until the first assistant Director, a friend of McTeigue who told him about the project, had to drop out and The Wachowskis made McTeigue first assistant Director. The film was released in 1999 and became a huge success.

In 2000 McTeigue worked with George Lucas and became the first assistant Director for Star Wars: Episode II – Attack of the Clones, which was released in 2002. Following this, he was also the first assistant Director for both Matrix sequels The Matrix Reloaded and The Matrix Revolutions.

In 2005 McTeigue made his directorial debut with V for Vendetta, written and produced by the Wachowskis. After spending so much time on The Matrix film series, they gave the opportunity to McTeigue to direct, first showing him a copy of the Vendetta graphic novel during post-production of The Matrix Revolutions.

Warner Bros. expressed dissatisfaction with the way Oliver Hirschbiegel's The Invasion shaped up and brought in James McTeigue for an additional 17 days of filming based on rewrites by the Wachowskis. The film was released in 2007 with the involvement of McTeigue and the Wachowskis being uncredited.

In 2008 he did second unit directing work on the Wachowskis' Speed Racer.

McTeigue directed Ninja Assassin, produced by the Wachowskis, which was out in 2009. The same year he was said to be directing a reboot of the Superman film series, a rumor that he neither confirmed nor denied, but Warner Bros. ultimately gave the job of rebooting the Superman franchise to Zack Snyder.

In 2012, he directed the thriller The Raven, a fictionalized account of the last days of Edgar Allan Poe's life, in which the poet and author pursues a serial killer whose murders mirror those in Poe's stories.

He partnered again with the Wachowskis to direct the Mexico City, Mumbai and parts of the Reykjavik units on their Netflix science fiction drama Sense8 which debuted in 2015. McTeigue got directing credit in two episodes.

Over the years McTeigue has been linked as Director of the films Osiris Release, Richard K. Morgan's Altered Carbon, Message From The King, Bloodsport and Alien Sleeper Cell but as of May 2016 none of them have moved forward.