Sternberg immigrated to the United States as a boy. He began working in films as early as 1911 for a film-servicing company, and by 1923 he was a scriptwriter and cameraman in Hollywood. The Salvation Hunters (1925), his first independent release, brought immediate recognition; it was a realistic portrait of waterfront life, almost entirely composed of motionless shots. Two years later he directed Underworld (1927), one of the outstanding pictures of the year. Marked by carefully created atmosphere, striking lighting effects, and colourful characterization, it initiated a series of pictures dealing with the criminal world that included The Drag Net (1928) and The Docks of New York (1928). The Last Command (1928), starring the German character actor Emil Jannings, furthered his reputation.

An American Tragedy (1931) and Crime and Punishment (1935) were the other important films he directed in the 1930s. Sternberg's popularity subsequently declined, and few pictures released after that were critically acclaimed.