Both of his parents were actors, and Stevens was the stage manager of his father's company until 1921, when he went to Hollywood to become a cameraman. He filmed many of the early Laurel and Hardy two-reel comedies and earned a reputation for meticulous craftsmanship. Six years after he directed his first picture, Stevens achieved fame with Alice Adams (1935) and Annie Oakley (1935). A series of comedies followed, including Swing Time (1936), a musical with Ginger Rogers and Fred Astaire; Vivacious Lady (1938); Woman of the Year (1942); The Talk of the Town (1942); and The More the Merrier (1943).

Stevens' later films were praised for effective camera work and overall visual composition, for the careful integration of music and visuals, and for the skillful handling of sentimental themes. Although I Remember Mama (1948), his first postwar picture, idealized the past, it is praised for its realistic background and emotional restraint. He won the Academy Award for best directing for A Place in the Sun (1951), a screen adaptation of Theodore Dreiser's novel An American Tragedy, and again in 1956 for Giant. He is also remembered for Shane (1953), a western now considered a classic; The Diary of Anne Frank (1959); and The Greatest Story Ever Told (1965). His last film was The Only Game in Town (1969).