Born Melchior Gaston Ferrer into a prosperous family, his Cuban-born father a medical surgeon and his mother a prominent New York City socialite. He is the brother of noted cardiologist and educator, Dr. M. Irené Ferrer. Mel Ferrer was educated at private schools before attending Princeton University until his sophomore year, when he dropped out to devote more time to acting. At that time he also worked as an editor of a small Vermont newspaper and wrote a children's book, "Tito's Hats."

Ferrer began acting in summer stock as a teenager and at age twenty-one was appearing on the Broadway stage as a chorus dancer, making his debut there as an actor two years later. After a bout with polio, he entered the radio world as a DJ in Texas and Arkansas, developing into a producer-director of top-rated shows for NBC in New York. He returned to Broadway and then became involved in motion pictures, directing more than ten feature films and acting in more than eighty.

In 1945 he made a modest directing debut with The Girl of the Limberlost, a low-budget black-and-white film for Columbia. He returned to Broadway to star in Strange Fruit, based on the novel by Lillian Smith. He made his screen acting debut in Lost Boundaries (1949), and as an actor is best remembered for his role of the lame puppeteer in the musical Lili (1953) (starring Leslie Caron) and as Prince Andrei in War and Peace (1956) (co-starring with his then wife, Audrey Hepburn).

He has been married five times, most notably to actress Audrey Hepburn from 1954 to 1968, and with whom he had a son, Sean Ferrer, born in 1960. He and Hepburn had acquired a home in Switzerland and after their divorce he maintained a residence in Lausanne and often worked on films in Europe. He has been married five times to four women (remarrying his first wife, Frances Pilchard, after his divorce from Barbara Tripp), and has five children in total by three of the marriages.

For his contribution to the motion picture industry, Mel Ferrer has a star on the Hollywood Walk of Fame at 6268 Hollywood Blvd.