He was born in Paris and grew up in the Les Halles quarter. He attended the Lycée Montaigne and the Lycée Louis-le-Grand. During World War I, he served as an ambulance driver. After the war, he started a career as a journalist under the pseudonym René Desprès. He also made his debut as an actor and became the assistant of Jacques de Baroncelli and Henri Diamant-Berger.
In 1924, he produced his first films, Entr'acte and Paris qui dort, which were followed by a quick succession of notable films. During World War II, he went to Hollywood and was stripped of his French citizenship by the Vichy government.
He was given an honorary doctorate by the University of Cambridge and received the Grand Prix du Cinéma Français in 1953. In 1960, he was elected to the Académie Française. He came to personify French film, and the prize for film awarded by the Académie Française bears his name.
Clair started making films before the advent of sound, and therefore had very conflicting views of its uses; he was forced to use sound in his films for financial success. However, in lieu of creating films from theater plays like other French directors, Clair used sound to take the audience out of the narrative and into a different reality.