Born in Los Angeles, California, he graduated from the University of Southern California law school and began in the movie business as an assistant director to Tod Browning in 1920, but honed his skills at the Hal Roach Studios for the rest of that decade. Hired by Hal Roach in 1923, McCarey initially wrote gags for the Our Gang series and other studio stars, then produced and directed shorts, including two-reelers with Charley Chase. While at Roach, McCarey cast Stan Laurel and Oliver Hardy together and guided development of their onscreen characters, thus creating one of the most enduring comedy teams of all time. He only officially appeared as director of the duo shorts We Faw Down (1928), Liberty (1929) and Wrong Again (1929), but wrote many of the screenplays. By 1929, he was vice-president of production for the entire studio.
In the sound era McCarey ventured into feature-film direction, working with many of the biggest stars of the era, including Gloria Swanson (Indiscreet, 1931), Eddie Cantor (The Kid From Spain, 1932), the Marx Brothers (Duck Soup, 1933), W.C. Fields (Six of a Kind, 1934), Mae West (Belle of the Nineties, 1934), and Harold Lloyd (The Milky Way, 1936). In 1937, McCarey won his first Academy Award for Directing for The Awful Truth, with Irene Dunne and Cary Grant, a screwball comedy that launched Cary Grant's unique screen persona, largely concocted by McCarey (Grant also copied many of McCarey's mannerisms). Along with the similarity in their names, McCarey and Cary Grant shared an eerie physical resemblance, making mimicking McCarey's intonations and expressions even easier for Grant. As writer/director Peter Bogdanovich notes, "After The Awful Truth, when it came to light comedy, there was Cary Grant and then everyone else was an also-ran."
McCarey was a devout Roman Catholic and deeply concerned with social issues. During the 1940s, his work became more serious and his politics more conservative. In 1944 he directed Going My Way, a story about an enterprising priest, the youthful Father Chuck O'Malley, played by Bing Crosby, for which he won his second Best Director Oscar. His share in the profits of this smash hit gave McCarey the highest reported income in the U.S. for the year 1944, and its follow-up, The Bells of St. Mary's (1945), which was made by McCarey's own production company, was similarly successful.
The public reacted negatively to some of his films after the Korean War. For instance, his anti-communist film My Son John (1952), failed at the box office. Five years later, he co-wrote, produced, and directed An Affair to Remember starring Cary Grant and Deborah Kerr, a remake (with precisely the same script) of his 1939 film Love Affair with Irene Dunne and Charles Boyer. He followed this hit with Rally 'Round the Flag, Boys! (1958), a comedy starring Paul Newman and Joanne Woodward. Some years later he directed his last picture, the poorly-received Satan Never Sleeps (1962).