Born in St Albans, Hertfordshire, Newell was educated at St Albans School and Magdalene College, Cambridge. He then attended a three year training course at Granada Television, with the intention of entering the theatre.

Newell directed various British TV shows from the 1960s onwards. However, he eventually graduated into film direction and then he went on to make the horror film The Awakening (1980) and Bad Blood (1982) about a New Zealand mass murderer.

His first film was The Man in the Iron Mask (1977), made for TV. His first critically acclaimed movie was Dance with a Stranger (1985), a biographical drama starring Miranda Richardson as Ruth Ellis, the last woman to be hanged in Great Britain. For his directing efforts, Newell won the Award of the Youth at the 1985 Cannes Film Festival.

Newell continued his successes in the film industry with Enchanted April (1992), an adaptation of the 1922 novel The Enchanted April; Miranda Richardson received a Golden Globe for Best Actress in a Comedy/Musical and Joan Plowright won a Golden Globe for Best Supporting Actress in a Comedy/Musical.

The comedy Four Weddings and a Funeral (1994) was also critically acclaimed - it won numerous awards, including a César Award (Best Foreign Film), a Golden Globe (Best Actor - Hugh Grant), and a few London Critics Circle Film Awards (Best Director, Film, Producer, and Screenwriter).

Since these award-winning productions, Newell has directed a number of Hollywood films, though none has been a major success. He directed Donnie Brasco (1997) (starring Al Pacino and Johnny Depp), Pushing Tin (1999) (starring John Cusack, Billy Bob Thornton, Cate Blanchett, and Angelina Jolie), Mona Lisa Smile (2003) (starring Julia Roberts, Kirsten Dunst, and Julia Stiles) and most recently Harry Potter and the Goblet of Fire, the fourth instalment of the Harry Potter series of fantasy novels and movies (and the third time he has worked with Miranda Richardson).

Harry Potter and the Goblet of Fire was a great hit world-wide, and was the most successful Harry Potter movie yet in many aspects. Ironically, he was the first British director of the series written by British author J.K. Rowling and starring an almost entirely British cast (Chris Columbus was American and Alfonso Cuarón was Mexican).

In 2005, Newell was presented with an honorary degree of Doctor of Arts by the University of Hertfordshire. The university is situated in and around St Albans, his birthplace.