Fox's siblings are Tom (born 1975), Robin (born 1976), Lydia (born 1979), and Jack (born 1985); Lydia and Jack are actors. His uncles are the actor Edward Fox and the theatrical and film Producer Robert Fox. The actors Emilia and Freddie Fox are his first cousins, being the children of Edward Fox. Fox is also Richard Ayoade's brother-in-law.

The third of five children of actor James Fox and his wife Mary Elizabeth Piper, His father James was the son of Major Robin Fox, theatrical agent, who married Angela Muriel Darita Worthington, a natural daughter of Frederick Lonsdale. Laurence Fox was born in 1978 in Yorkshire. At the age of thirteen he entered Harrow School where, according to him, he was "shy around women, sensitive and a bit naïve". Although he made friends and liked the drama Teacher, he hated the school's strict regimen and felt despised and out of place among pupils with titles and wealth. Constantly in trouble for smoking, fighting, going into town and seeing girls, he was eventually expelled a few weeks before his A-levels. According to him, "It was something to do with a girl at a dance. I went back to take the exams, but I wasn't allowed to speak to anyone." With hindsight, Fox has said that his experience at Harrow enabled him to portray "toffs" – the upper-class boys looking down on him and whom he disliked – with much insight and cynicism.

As a result, Fox was cast in the ITV detective drama Lewis as Detective Sergeant James Hathaway, a Cambridge-educated former trainee priest who becomes the partner of Detective Inspector Robert Lewis, played by Whately. The pilot of this spin-off from Inspector Morse (1987–2000), was ITV's highest rated drama of 2006.

Fox, who graduated from RADA on 1 July 2001, followed up The Hole by appearing in Robert Altman's 2001 Academy Award-winning film Gosford Park. He then donned uniforms in a slew of film and television features, including roles as a German airman in Island at War (2004), an SS officer in The Last Drop (2005), and as British Soldiers in the 2002 films Deathwatch and Ultimate Force, and in Colditz (2005). In the last made-for-television film, Fox played Capt. Tom Willis who, after an unsuccessful attempt to break out of a prisoner-of-war camp, is brought to Oflag IV-C in Colditz Castle, one of the most infamous German POW camps for officers in World War II. Actor Kevin Whately caught Fox's performance in the last ten minutes of the film, which he characterised as "this young English boy going bonkers and wandering out to be shot", and thought "He's interesting." The next day, at a lunch meeting with "all the powers that be" regarding a new project, Whately mentioned that Fox "would be worth taking a look at".

Real people that Fox has portrayed include Prince Charles, in Whatever Love Means (2005); Wisley, one of Jane Austen's suitors, in Becoming Jane (2007); and Sir Christopher Hatton, the Lord Chancellor of England in Elizabeth: The Golden Age, also released in 2007. In addition, in that year Fox was seen on ITV as Cecil Vyse in Andrew Davies' adaptation of A Room with a View based on E.M. Forster's 1908 novel. He has expressed a Desire to appear in a western, and to star as James Bond – the closest he got to the latter was losing the role of villain Gustav Graves in Die Another Day (2002) to Toby Stephens.

Fox dated British Actress Billie Piper in 2006 while they performed together in the stage play Treats. On 31 December 2007 Fox married Piper in the 12th century parish church of St. Mary's in Easebourne, West Sussex. During a 21 February 2008 interview on ITV breakfast show GMTV, Fox revealed that after a "drunken lunch" during their honeymoon in Mexico he and Piper got matching tattoos to celebrate their marriage. His tattoo, on his forearm, reads "Mrs Fox 31 December 2007," while hers states "Mr Fox." As of 2007 Fox and Piper lived in a country cottage in the market town of Midhurst in West Sussex. In March 2008 it was reported that Piper had expressed to family and friends a Desire to adopt children as well as to have children of her own with Fox. On 27 April 2008 The Sun, quoting an unnamed source, announced that Piper was three months pregnant and that she and Fox were "absolutely over the moon". On 21 October 2008, Piper gave birth to a son, Winston James Fox, by emergency Caesarean section. Piper gave birth to their second son, Eugene Pip, on 5 April 2012. On 24 March 2016, Fox announced on his Facebook page that the pair had split after eight years of marriage. He stated that no third party was involved in the separation. On 12 May 2016, it was announced that Fox and Piper had divorced after more than eight years of marriage.

Some information in this table was obtained from the following websites: Laurence Fox, Royal Academy of Dramatic Art, archived from the original on 3 February 2008, retrieved 18 March 2008 ; Laurence Fox: Other works, Internet Movie Database (IMDb), retrieved 16 March 2008 .

Despite doing well in his A-level examinations, because of his report from Harrow he was unable to obtain a place at any university. After working as a gardener for two years, and a stint as an office worker which he loathed, he discovered that he enjoyed acting and enrolled at the Royal Academy of Dramatic Art (RADA). During his time there he appeared in numerous theatre productions, including the lead roles of Gregers Werle in Ibsen's The Wild Duck, Marcus Andronicus in Titus Andronicus, and Stephen Daedalus in an adaptation of James Joyce's novel Ulysses. However, he was disappointed to find that he was treated "like a nonce" for being an Old Harrovian. He also made himself more unpopular by being outspoken and taking on roles in his second and third years despite the practice being forbidden by school policy. One of these was his first break into film – the 2001 horror-thriller The Hole. Fox feels that in landing the role his name "probably helped – it's a combination of timing, luck and contacts". Nonetheless, "the name opens some doors, but then you have to show you can do the job".

On stage, Fox appeared in Mrs. Warren's Profession by George Bernard Shaw at the Strand Theatre (now the Novello Theatre) in London in 2002, and John Ford's 17th-century play 'Tis Pity She's a Whore in 2005. Between 2006 and 2007 he starred in Treats by Christopher Hampton with his Future wife, Billie Piper. In April 2007, Fox lost his temper with a paparazzi Photographer outside the Garrick Theatre in London where he was performing in Treats and was arrested for assault. He was later released after receiving a police caution. Newspaper reports stated that the caution would remain on his record for three years and might prevent his obtaining a visa to perform in the US. In 2013, Fox played Guy Haines in Strangers on a Train at London's Gielgud Theatre. On 9 May 2015 he portrayed a wartime soldier composing a letter at VE Day 70: A Party to Remember in Horse Guards Parade, London that was broadcast live on BBC1.

In March 2016 Laurence Fox apologised for swearing at a member of the audience who had been muttering audibly in the front row during a performance of The Patriotic Traitor at London's Park Theatre on 8 March. The audience saw Fox step out of character - that of French statesman Charles de Gaulle - and chastise the heckler with robust language. "If someone is hell-bent on heckling, they are ruining it for everybody," he explained to Sarah Montague on the Today programme on 10 March 2016. "It becomes an un-performable play, the play stops at that moment."