Jarratt was born and grew up in Wongawilli, a small rural town near Wollongong, New South Wales, and later in the Snowy Mountains area. Jarratt's father was a coal miner, and later a concreter working on the Snowy Mountains Hydro-Electric Scheme. Jarratt comes from a family of Irish Catholic descent; however, his patrilineal ancestor George Jarratt, born 1833, came from Croxton in Cambridgeshire, England. George's son John married Mary Kelly from Ireland.

Jarratt graduated from the National Institute of Dramatic Art (NIDA) in 1973. His screen debut was in The Great Macarthy (1975). He also appeared in Peter Weir's Picnic at Hanging Rock (1975) and Summer City (1977) with Mel Gibson. Jarratt had the lead role in the 1979 mini series The Last Outlaw playing Ned Kelly. He played a major supporting role as a young Australian soldier in Vietnam War movie The Odd Angry Shot (1980). In the late 1980s, Jarratt recognised he had a Problem with binge-drinking and related violence. He joined Alcoholics Anonymous, an organisation in which he continues to be active.

In the 1990s, Jarratt was a presenter on the lifestyle show Better Homes and Gardens with then-wife Noni Hazlehurst. He had guest roles in Inspector Morse, Police Rescue, Blue Murder, Water Rats and Blue Heelers in the 1990s and 2000s. He joined the cast of McLeod's Daughters in 2001, and left the show in 2006. In 2010, Jarratt appeared in a commercial for Husqvarna.

In 2005, Jarratt had a major role in the Australian film Wolf Creek, playing the villain Mick Taylor. In 2007, he appeared in two films, Rogue and The Final Winter. Jarratt also had a small role in the 2008 film, Australia, as a soldier.

In August 2007, Jarratt filed a lawsuit against the Seven Network over a story which ran on the current affairs show Today Tonight. Jarrett claimed the story defamed him. The story told of Jarratt in a dispute with his tenant and how he had made attempts to intimidate and evict the tenant. The story allegedly accused Jarratt of echoing his character Mick Taylor from the film Wolf Creek in his intimidation, described an answering machine message left by him to his tenant saying "I have always been a winner - a winner". A Lawyer for Seven told the court that the story had not portrayed Jarratt as a "psychopathic killer". The case was adjourned until October 12th, 2007.

In 2008, Jarratt launched his own film production company, Winnah Films. Winnah's first feature film, Savages Crossing (originally carrying the working title Flood) went into principal photography outside Ipswich, Queensland in February. In 2009, he appears as the father of a teenage girl via phone in Telstra's "Next G" commercials.

In 2010, Jarratt starred in the ensemble exploitation extravaganza, Bad Behaviour, written and directed by Joseph Sims. In the same year, Jarratt also had a role in the supernatural horror movie Needle.

Jarratt has been married three times. With his first wife, Rosa Miano, he had two children, Zadia and Ebony. He was married to Actress Noni Hazlehurst, with whom he had two more children, Charlie and william. Most recently, he married Cody Jarrett, whom he met as a Producer on Better Homes and Gardens, and had a further two boys, Jackson and Riley. Cody and John separated in late 2011/early 2012.

He made a cameo in Quentin Tarantino's Django Unchained in 2012, appearing as an employee of the Le Quint Dickie Mining Company alongside Tarantino himself, both appearing with Australian accents.

In May 2013, Jarratt filmed a guest star role in the third instalment of the ABC telemovie series, Jack Irish: Dead Point.

In January 2014, a new thriller called StalkHer began filming on the Gold Coast, Queensland. The film is co-directed with Kaarin Fairfax by Jarratt, who also stars in the production. The Producer of the film is 'OZPIX', a production company partly owned by Jarratt. Filming was completed in February 2014, and screened later in the year.

On 1 October 2015, Jarratt released his autobiography, The Bastard from the Bush. On 19 October, a six-part television adaptation of Wolf Creek was announced, with Jarratt reprising his role as Mick Taylor. It was commissioned by streaming company Stan and was released on 12 May 2016. Jarratt returned to audio drama work, after working for the ABC in the 1970s to co-star in Benjamin Maio Mackay's adaptation of The Phoenix Files in 2017.