As a young man, Freeman had aspirations of being a fighter pilot; however, a stint in the air force (1955–59) proved disappointing, and he turned his attention to acting. He made his Broadway debut in an all-black production of Hello Dolly! in 1967. In the 1970s he continued to work on stage and also appeared on the educational children's television show The Electric Company as the character Easy Reader. Freeman's performance in the film Brubaker (1980) and on the soap opera Another World (1982–84), along with several enthusiastic reviews for his theatrical work in the early 1980s, led to more challenging film roles. His portrayal of a dangerous hustler in Street Smart (1987) earned Freeman his first Academy Award nomination, for best supporting actor. He was later nominated for a best-actor Oscar for his work in Driving Miss Daisy (1989), in which he re-created the role of Hoke after first performing it on stage. A third Oscar nomination came for his soulful turn as a convict in The Shawshank Redemption (1994).

At the beginning of the 21st century, Freeman appeared in several crime dramas, including Along Came a Spider (2001), a sequel to his earlier role as a detective in Kiss the Girls (1997), both based on James Patterson novels, as well as The Sum of All Fears (2002). In 2005 he played Lucius Fox, a research and development guru, in Batman Begins. That year he also won an Academy Award for best supporting actor for his performance as a former boxer in Clint Eastwood (Eastwood, Clint)'s Million Dollar Baby (2004). Freeman's later films include The Bucket List (2007), in which he and Jack Nicholson (Nicholson, Jack) played terminally ill cancer patients who make the most of their remaining time, and Dark Knight (2008), the sequel to Batman Begins. In 2008 Freeman returned to Broadway after nearly 20 years away from the stage, taking the role of Frank Elgin, a talented yet dispirited actor who has lost the will to perform, in The Country Girl.

Freeman won acclaim on stage for performances that ranged from drunks to Shakespearean leads. On screen he thrived in roles written specifically for black actors, such as a disciplinarian principal in Lean on Me (1989) and a hard-hearted Civil War soldier in Glory (1989), as well as in roles that most often fall to white actors, such as an aging gunslinger in Unforgiven (1992) and an analytical detective in Seven (1995). He made his directorial debut with the antiapartheid film Bopha! (1993). Freeman was the recipient of numerous awards, and in 2008 he received the Kennedy Center's Lifetime Achievement Award.