In the 1920s the Thompsons moved to Panama, where Charles worked on the construction of the airport there. While in Panama, Dall was in a theatre when a cast member fell ill and Dall stepped in; this caused him to get the acting bug. His father committed suicide in 1929, and his widow returned to New York City with John the following year.

Film historians william J. Mann and Karen Burroughs Hannsberry have remarked that Dall was gay but claimed in media interviews to have had a brief marriage in the early 1940s. No marriage certificate has come to light, and his death certificate records him as "never married". Hedda Hopper once linked his name with Jane Withers romantically.

Dall had small roles on Broadway during the 1941-42 season in R.U.R. and Janie. In 1942-43 he played the lead of Quizz Martin in the touring company The Eve of St Mark. He was well received and replaced william Price on Broadway so Price could take a vacation. His performance was spotted by Jack Warner's wife and resulted in a Warners screen test for Dall. Warners offered him a contract but he would only take it if he could have time off to do a play. (Warners also signed Prince.)

Dall returned to the stage to play the lead in Norman Krasna's Dear Ruth (1944), under the direction of Moss Hart. It was a huge success. The New York Times said Dall gives "a graceful and easy performance". Even before The Corn is Green was released Warners announced Dall was one of six contractees they intended to build into a star (the others were Lauren Bacall, Dane Clark, Faye Emerson, Robert Hutton and Prince.)

The film rights to Dear Ruth were sold to Paramount who ended up casting william Holden in the part originated by Dall. Warners brought the screen rights to John Patrick's play The Hasty Heart and announced Dall would play the role originated by Richard Basehart. Warners gave Dall three months leave to perform The Hasty Heart (1945) on stage on the road. However the film was not made for several more years by which time Richard Todd had been cast in the role.

Paramount announced they were interested in signing Dall and Edward G. Robinson for a role in an adaptation of The Wayfarers. In May 1946 he signed a seven year deal with David O. Selznick's Vanguard Films. Dall performed Hasty Heart in summer stock.

Dall wound up making no films for Selznick. Instead he went over to Universal, where he signed a contract. He played Deanna Durbin's love interest in Something in the Wind (1947); the Los Angeles Times described him as "ill at ease". He was in Another Part of the Forest (1948), based on the play by Lillian Hellman.

Alfred Hitchcock cast Dall in Rope (1948) as one of two killers (the other played by Farley Granger) who match wits with James Stewart. The film was not a big hit on release but its reputation has grown in recent years.

Dall made his TV debut in "Miracle in the Rain" for The Chevrolet Tele-Theatre in 1949. He appeared in another cult classic when he played the lead in Gun Crazy (1949) opposite Peggy Cummins.

In late 1950 he appeared in The Man by Mel Dinelli on stage in Los Angeles with Gladys George. The Los Angeles Times said he played his role with "tremendous assurance".

In stock he appeared in The Hasty Heart (1952), Gramercy Ghost (1952), The Moon is Blue (1953), The Man Who Came to Dinner, and Born Yesterday (1953).

Dall also worked a lot in television, appearing on such shows as Lights Out ("Pit of the Dead"), The Clock ("A Right Smart Trick"), Studio One in Hollywood ("The Doctor's Wife"), Broadway Television Theatre ("Outward Bound", "The Hasty Heart"), Suspense ("The Invisible Killer", "The Tenth Reunion"), General Electric Theatre ("The Coward of Fort Bennett") and Schlitz Playhouse ("And Practically Strangers"). Other theatre performances in stock included The Male Animal (1954).

Dall returned to Broadway for Leslie Stevens' Champagne Complex, which had a short run in 1955.

Dall's first film in eight years was Spartacus (1960), where he played a Roman soldier. He was the villain in MGM's Atlantis, the Lost Continent (1961), his final theatrical feature.

Dall sustained a serious fall while visiting London in October 1970, and died of a heart attack, a complication of an infection of the pericardium at his home in Beverly Hills, California on January 15, 1971, aged 50. His body was donated to medical science.

According to music Journalist Phil Milstein, at the time of his death Dall had lapsed into alcoholism and was living with his partner, actor Clement Brace (died 1996).