At Harvard University, Hand studied philosophy (under William James, Josiah Royce, and George Santayana) and law, and thereafter he practiced law in Albany and New York City. In 1909 he was appointed a federal district judge in New York, and in 1924 he was elevated to the United States Court of Appeals for the second circuit (New York, Connecticut, and Vermont), one of his colleagues being his cousin Augustus Noble Hand. From 1939 he served as chief judge. He sat in many cases after his official retirement in 1951.

Because several Supreme Court justices disqualified themselves, Hand's court rendered the final decision (1945) in a major antitrust suit against the Aluminum Company of America (usually called the Alcoa case). After a trial lasting four years, Hand wrote for the court an opinion rejecting the “rule of reason” that the Supreme Court had applied in antitrust cases since 1911. He ruled that evidence of greed or lust for power was inessential; monopoly itself was unlawful, even though it might result from otherwise unobjectionable business practices. In his view, “Congress did not condone ‘good trusts' and condemn ‘bad ones'; it forbade all.”

In 1950 Hand sustained the conviction of 11 American Communist Party leaders on Smith Act charges of conspiracy to teach and advocate the overthrow of the government. His reasoning was adopted by Chief Justice Fred M. Vinson when the Supreme Court also upheld the convictions (Dennis v. United States, 1951). In a later case (Yates v. United States, 1957), the Supreme Court under Chief Justice Earl Warren considerably restricted the applicability of the Smith Act.

A collection of Hand's papers and speeches was edited as The Spirit of Liberty (1952; 3rd ed., 1960) by Irving Dilliard. Hershel Shanks selected and annotated 43 opinions by Hand for The Art and Craft of Judging (1968).