Kotto was born in New York City. His mother was Gladys Marie, a nurse and U.S. Army officer. His father is Avraham Kotto (originally named Njoki Manga Bell), a businessman from Cameroon who immigrated to the United States in the 1920s. In his autobiography titled Royalty, Kotto writes that his father was "the crown Prince of Cameroon". However, Cameroon is a republic and its monarchs have limited responsibilities as auxiliaries of the state, which they must support at all times. It is a typical Example of an intrastate African monarchy.

His first marriage was to Rita Ingrid Dittman, whom he married in 1962. They had three children together. They divorced in 1975.

His film debut was in 1963 in an uncredited role in 4 For Texas. He performed in Michael Roemer's Nothing But a Man (1964) and played a supporting role in the caper film The Thomas Crown Affair (1968) . He played John Auston, a confused Marine Lance Corporal, in the 1968 episode, "King of the Hill", on the first season of Hawaii Five-O. In 1973 he landed the role of the James Bond villain Mr. Big in Live and Let Die, as well as roles in Across 110th Street and Truck Turner. Kotto portrayed Idi Amin in the 1977 television film Raid on Entebbe. He also starred as an auto worker in the 1978 film Blue Collar.

Kotto's second marriage was to Antoinette Pettyjohn, on January 29, 1975. They had two children together and divorced in 1996.

He has written two books: Royalty, and The Second Coming of Christ, and also wrote scripts for Homicide: Life on the Street (1993–1999).

Kotto married Tessie Sinahon in July 1998. They currently live in Baltimore, Maryland.

The following year he played Parker in the sci-fi–horror film Alien. He followed with a supporting role in the 1980 prison drama Brubaker. In 1983, he guest-starred as mobster "Charlie" in The A-Team episode "The Out-of-Towners". In 1987, he appeared in the Futuristic sci-fi movie The Running Man, and in 1988, in the action-comedy Midnight Run, in which he portrayed Alonzo Moseley, an FBI agent.

In 2014, Kotto portrayed the voice of Parker for the video game Alien: Isolation, reprising the same role he played in the movie Alien in 1979.

Kotto said he learned that his father's family was royal in adult life while studying his family's lineage, and said he is also a descendant of Queen Victoria. According to Kotto, his father was an observant Jew who spoke Hebrew. Kotto's mother, who was of Panamanian descent, converted to Judaism before marrying his father. Kotto claims that his great-grandfather, whom he names "King Alexander Bell", ruled the Douala region of Cameroon in the late-19th century and was also a practicing Jew. Kotto has said that his paternal family originated from Israel many centuries ago, migrating to Egypt and then Cameroon, and have been African Jews for many generations. His claim of being a descendant of Queen Victoria has been denied by the Buckingham Palace press office.