Douglas Fairbanks was born Douglas Elton Thomas Ullman in Denver, Colorado, to Ella Adelaide (nee Marsh) and Hezekiah Charles Ullman, an attorney and native of Pennsylvania, who was a captain for the Union forces during the Civil War. Fairbanks' paternal grandparents were German Jewish immigrants, while his mother, a Southerner with roots in Louisiana and Georgia, was of British Isles descent. From the age of five he was raised by his mother due to her husband's abandonment. She changed her sons' surnames to Fairbanks (her former husband's surname) and covered up their paternal Jewish ancestry.

He began amateur theater at age 12 and continued while attending the Colorado School of Mines. In 1900 they moved to New York. He attended Harvard, traveled to Europe, worked on a cattle freighter, in a hardware store and as a clerk on Wall Street. He made his Broadway debut in 1902 and five years later left theater to marry an industrialist's daughter.

He returned when his father-in-law went broke the next year. In 1915, he went to Hollywood and worked under a reluctant D.W. Griffith. The following year he formed his own production company. During a Liberty Bond tour with Charles Chaplin he fell in love with Mary Pickford with whom he, Chaplin and Griffith had formed United Artists in 1919. He made very successful early social comedies, then highly popular swashbucklers during the 'twenties. The owners of Hollywood's Pickfair Mansion separated in 1933 and divorced in 1936. In March 1936, he married and retired from acting.