Nakadai grew up in a very poor family and was unable to afford a university education, prompting him to take up acting. He greatly admired American films and was a fan of actors such as John Wayne and Marlon Brando. Nakadai was working as a shop clerk in Tokyo before a chance encounter with Director Masaki Kobayashi led to him being cast in the film The Thick Walled Room. The following year, he made a brief and uncredited cameo in Seven Samurai where he is seen for a few seconds as a samurai walking through town.Nakadai's role in Seven Samurai is technically his debut as The Thick-Walled Room's release was delayed for three years due to controversial subject matter. His major breakthrough as an actor came when he was given the part of Jo, a young yakuza in Black River, another film directed by Kobayashi. Nakadai continued to work with Kobayashi into the 1960s and won his first Blue Ribbon Award for his role in Harakiri as the aging rōnin Hanshiro Tsugumo.

Nakadai appeared in two Kurosawa films from the 1980s. In Kagemusha Nakadai plays both the titular thief turned body-double and the famous daimyō Takeda Shingen whom the thief is tasked with impersonating. This dual role helped him win his second Blue Ribbon Award for Best Actor. In Ran Nakadai plays another daimyo, Hidetora Ichimonji, who is loosely based on King Lear from Shakespeare's play King Lear.

Nakadai worked with a number of Japan's best-known filmmakers—starring or co-starring in five films directed by Akira Kurosawa, as well as being cast in significant films directed by Hiroshi Teshigahara (The Face of Another), Mikio Naruse (When a Woman Ascends the Stairs), Kihachi Okamoto (Kill! and The Sword of Doom), Hideo Gosha (Goyokin), Shirō Toyoda (Portrait of Hell) and Kon Ichikawa (Enjō and Odd Obsession).