Walsh was educated at Seton Hall College. He began acting in 1909, first as a stage actor in New York City and later as a film actor. In 1914 he became an assistant to D.W. Griffith and made his first full-length feature film, The Life of General Villa, shot on location in Mexico with Pancho Villa playing the lead and with actual ongoing battles filmed in progress as well as recreations (events dramatized in the 2003 film And Starring Pancho Villa as Himself, with Kyle Chandler playing Walsh).

Walsh played John Wilkes Booth in Griffith's epic The Birth of a Nation (1915) and also served as an assistant Director. This was followed by the critically acclaimed Regeneration in 1915, possibly the earliest feature gangster film, shot on location in Manhattan's Bowery district.

Walsh served as an officer in the United States Army during World War I. He later directed The Thief of Bagdad (1924), starring Douglas Fairbanks and Anna May Wong, and What Price Glory? (1926), starring Victor McLaglen and Dolores del Río.

In Sadie Thompson (1928), starring Gloria Swanson as a prostitute seeking a new life in Samoa, Walsh starred as Swanson's boyfriend in his first acting role since 1915; he also directed the film. He was then hired to direct and star in In Old Arizona, a film about O. Henry's character the Cisco Kid. While on location for that film Walsh was in a car crash when a jackrabbit jumped through the windshield as he was driving through the desert; he lost his right eye as a result. He gave up the part and never acted again. Warner Baxter won an Oscar for the role Walsh was originally slated to play. Walsh would wear an eyepatch for the rest of his life.

In the early days of sound with Fox, Walsh directed the first widescreen spectacle, The Big Trail (1930), an epic wagon train western shot on location across the West. The movie starred John Wayne, then unknown, whom Walsh discovered as prop boy Marion Morrison and renamed after the Revolutionary War general Mad Anthony Wayne; Walsh happened to be reading a book about him at the time. Walsh directed The Bowery (1933), featuring Wallace Beery, George Raft, Fay Wray and Pert Kelton; the energetic movie recounts the story of Steve Brodie (Raft), supposedly the first man to jump off the Brooklyn Bridge and live to brag about it.

An undistinguished period followed with Paramount Pictures from 1935 to 1939, but Walsh's career rose to new heights after he moved to Warner Brothers, with The Roaring Twenties (1939), featuring James Cagney and Humphrey Bogart; Dark Command (1940), with John Wayne and Roy Rogers (at Republic Pictures); They Drive By Night (1940), with George Raft, Ann Sheridan, Ida Lupino and Bogart; High Sierra (1941), with Lupino and Bogart again; They Died with Their Boots On (1941), with Errol Flynn as Custer; The Strawberry Blonde (1941), with Cagney and Olivia de Havilland; Manpower (1941), with Edward G. Robinson, Marlene Dietrich and George Raft; and White Heat (1949), with Cagney. Walsh's contract at Warners expired in 1953.

He directed several films afterwards, including three with Clark Gable: The Tall Men (1955), The King and Four Queens (1956) and Band of Angels (1957). Walsh retired in 1964. He died of a heart attack in 1980.