Of Cuban and Mexican parentage, Franco was born in Madrid and studied at the city's Instituto de Investigaciones y Experiencias Cinematográficas and the Institut des hautes études cinématographiques in Paris. He began his career in 1954 (aged 24) as an assistant Director in the Spanish film industry, performing many tasks including composing music for some of the films as well as co-writing a number of the screenplays. He assisted a number of Directors such as Joaquín Luis Romero Marchent, Leon Klimovsky and Juan Antonio Bardem. After working on more than 20 films, he decided to get into directing films in 1959, making a few musicals and a crime drama called Red Lips.

In 1960, Franco took Marius Lesoeur and Sergio Newman, two Producer friends, to a cinema to see the newly released Hammer horror film The Brides of Dracula and the three men decided to get into the horror film Business. His career took off in 1961 with The Awful Dr. Orloff (aka Gritos en la noche), which received wide distribution in the United States and the UK. Franco wrote and directed Orloff, and even supplied some of the music for the film. In the mid-1960s, he went on to direct two other horror films, then proceeded to turn out a number of James Bond-like spy thrillers and softcore sex films based on the works of the Marquis de Sade (which remained one of his major influences throughout his career).

Franco was married at the time to Nicole Guettard (their marriage running approximately from 1962 through 1980), Ms. Guettard being gradually replaced in Franco's life by Lina Romay. (Nicole worked as a script consultant on many of Franco's films while they were married, and even acted in a few of them. Her daughter from an earlier marriage, Caroline Riviere, also appeared in a few Franco films in the early 1970s (including the risque Exorcisme and The Perverse Countess).

Although he had some American box office success with Necronomicon (1967), 99 Women (1968) and two 1969 Christopher Lee films — The Bloody Judge and Count Dracula — he never achieved wide commercial success. Many of his films were only distributed in Europe, and most of them were never dubbed into English.

After discovering Soledad Miranda (he first used her in his Count Dracula), Franco moved from Spain to France in 1969 so that he could make more violent and erotic films free of the strict censorship in Spain, and it was at this point that his career began to go downhill commercially as he turned to low-budget filmmaking with an accent on adult material. Soledad Miranda starred in a series of six erotic thrillers for Franco, all made within a one-year period (including Vampyros Lesbos), after which she was killed in a tragic automobile accident in Portugal in 1970, just as her career was taking off.

A year or two after Soledad Miranda died, a grieving Franco discovered a new leading lady in Actress Lina Romay. At the time, the teenage Romay was married to a young actor/photographer named Ramon Ardid, but as she and Franco became more involved in their film projects together over the years, her marriage to Ramon ended in divorce around 1975.

Franco was supposed to write & direct a film for Eurocine Productions in 1980 called Lake of the Living Dead (a horror film about revived Nazi zombies) but after submitting the script, he had a falling out with the producers, Marius and Daniel Lesouer, who immediately hired French horror film Director Jean Rollin to direct it (later retitling it Zombie Lake). Many fans regard this as a Franco film, although Franco only contributed to the script. Rollin later said in interviews he only did the film as a favor for the Lesoeurs, and that if he knew "how bad" the script was, he wouldn't have done it.

Franco later directed another film for the Lesouers called Oasis of the Zombies (aka Bloodsucking Nazi Zombies on VHS) in 1981, which had a plot very similar to Zombie Lake (also involving revived Nazi zombies). Franco simultaneously shot a variant version of Oasis of the Zombies (on the producers' dime) starring Lina Romay and his "regulars" which was apparently released only in Spain, under the title La Tumba de los Muertos Vivientes (which may well be lost).

Franco and Lina Romay worked together for 40 years, and lived together from 1980 onward, although they were only officially married on 25 April, 2008. Until her death in 2012 (from cancer at age 57), Romay was his most regular Actress, as well as his life companion and muse.

Franco suffered a severe stroke on 27 March 2013, and was taken to a hospital in Málaga, Spain, where he died early on the morning of 2 April. He was 82 years old.

In his later years, he did however get the opportunity to turn out two rather big-budget horror films — Faceless (1988) and Killer Barbys (1996) — both of which showed what great work he could still do when his projects were adequately funded. The entirety of his work after 1996 was direct-to-video films of very low quality, none of which were distributed theatrically. Romay died of cancer in 2012, after which Franco died in April 2013 from natural causes, aged 82.