Leaving high school before graduating, he started a small band which traveled to Mexico. He returned months later to pursue an acting career, but continued working full-time as a musician. He played banjo and guitar for big bands, including the Henry Halstead Orchestra. He recorded one of the earliest Vitaphone movie shorts called Carnival Night in Paris (Warner Brothers, 1927). Ayres wrote, "I was a member of Henry Halstead's orchestra in 1927 at the Mission Beach Ballroom in San Diego, California for the summer. My instruments were tenor banjo, long-neck banjo and guitar. After a hiatus, I rejoined Mr. Halstead with a new group, including Phil Harris, on New Year's Eve the same year for the opening night of the Beverly Wilshire Hotel, a memorable occasion." He left a national tour to pursue a career as an actor full-time.

Ayres was discovered at a night club by talent agent Ivan Kahn. He was cast to play opposite Greta Garbo in The Kiss (1929), but it was his leading role in the original version of All Quiet on the Western Front (1930) that made him a star, secured him a contract with Universal—and made him a conscientious objector to World War II. (See below.) He made a number of mostly forgotten B movies for Universal, with the exception of Iron Man (1931), with Jean Harlow. His most successful movies at this time were those he made on loan to other studios, including The Doorway to Hell (1930) with James Cagney in a supporting role, and as Janet Gaynor's leading man in both State Fair (1933) and Servants' Entrance (1934), which featured a combination of live action and Walt Disney animation in a musical dream sequence, both for Fox Films.

Ayres was married three times. He was married to Actress Lola Lane from 1931 to 1933, and to Actress Ginger Rogers from 1934 to 1940, whom he met while starring in the film Don't Bet on Love (1933). He was separated from both women considerably earlier than their legal divorces. His third marriage, to Diana Hall, lasted from 1964 until his death in 1996. They had one son, Justin, born in 1968.

Ayres left Universal to sign with Fox Films. In 1934 he was listed as one of Fox's second tier stars.

He moved to poverty row studio Republic Pictures to pursue a second career as a Director, including the film Hearts in Bondage (1936), starring James Dunn and Mae Clarke. He moved to Paramount Pictures before finally being signed to MGM in 1938. At this time, he was loaned from Paramount to play the role of Ned in Holiday (1938). The role earned him considerable critical attention, including interest from MGM to put him under contract specifically for the role of Dr. James Kildare in an upcoming film series. Ayres played the role in nine films from 1938 to 1942 (and again in a 1950s radio series) while also appearing in light comedies for MGM, including Spring Madness and Rich Man, Poor Girl (both 1938), The Ice Follies of 1939 (1939), and Fingers at the Window (1942).

In March 1942, Ayres was identified as a 4E conscientious objector and sent to a CO camp. As expected, the announcement that a Hollywood actor objected to the war was a major source of public outcry and debate. Within a month it was determined that he had initially requested to be A-O-1, so that he could serve as a non-combat medic. However, the military's policy that servicemen cannot request, or be guaranteed, where they will serve, forced him to request a 4E status. The U.S. military confirmed that they would place him as a medic and in April 1942, his status was changed. He enlisted in the United States Army on May 18, 1942.

Ayres gradually moved to television, appearing in several anthology series in guest roles. In the summer of 1958, he hosted eleven original episodes of a CBS Western anthology television series called Frontier Justice, a production of Dick Powell's Four Star Television. He was offered the part of Dr. Kildare in an NBC series but his prescient request that the show have no cigarette advertising led to the offer being withdrawn, and the part going, in 1961, to Richard Chamberlain. He appeared as the Vice-President in Advise & Consent (1962), and in The Carpetbaggers (1964), but he was by then primarily a television actor, with only occasional film work. For a guest role in Kung Fu ("The Vanishing Image", 1974) he was nominated for an Emmy.

In 1960, Ayres was inducted into the Hollywood Walk of Fame with two stars. His motion pictures star is located at 6385 Hollywood Boulevard while his radio star is located at 1724 Vine Street.

His documentary film Altars of the World (1976), based on a series of documentaries he made titled Altars of the East (1956), brought his Eastern philosophical beliefs to the screen and earned him critical acclaim and a Golden Globe Award for best documentary in 1977. Ayres guest-starred in an episode of The Bionic Woman ("Doomsday is Tomorrow", 1977) as Dr. Elijah Cooper, an elderly nuclear scientist who attempts to blackmail the world into peace. In 1985, he was cast in his first series as a regular cast member, as the father of Robert Wagner in the short-lived series Lime Street. His last role was in the made-for-TV film Hart to Hart: Crimes of the Heart (1994), also starring Wagner.

Lew Ayres died December 30, 1996, just two days after his 88th birthday. He was survived by his wife of 32 years, Actress Diana Hall, and their son, Justin Ayres. Ayres was a Lutheran.