Lee was born on 10 January 1908, the son of Nellie (née Smith) and Edmund James Lee. He was born in either County Cork in what is now the Republic of Ireland, or Brentford, London. Lee's father was also an actor and Bernard's first appearance on stage in 1914, at the age of six, was with his father in a sketch called "The Double Event" at the Oxford Music Hall in London. Lee attended the Royal Academy of Dramatic Art, working as a fruit porter to pay his fees. During the 1930s, after graduating from RADA, he initially worked in repertory theatre in Rusholme, Manchester and Cardiff before beginning work on the West End stage in thrillers, such as Blind Man's Bluff. Lee also played comedic roles, such as with Arthur Askey in Ten Minute Alibi.
Lee's screen debut was in The Double Event in 1934, followed by a role as Cartwright in Berthold Viertel's Rhodes of Africa (1936), a biopic of Cecil Rhodes, in which he starred alongside Walter Huston, Oskar Homolka, and Basil Sydney. Terence Pettigrew mentions a "witty scene" featuring Bernard Lee in the film in which he is "struggling to put on a tight collar prior to slipping into town for a few ales." Although Lee was in wartime service in the army between 1940 and 1946, he had managed to act in several films earlier which were released between 1939 and 1943, including Murder in Soho, The Frozen Limits, Let George Do It! (known in the US as To Hell with Hitler), Spare a Copper, Once a Crook and The New Lot.
Lee's wartime service was with the Royal Sussex Regiment, and while he was awaiting his demob he attended golfing ladies' night, where he met a producer, and was subsequently offered a part in the play Stage Door.
After the war, Lee returned to the stage whilst also developing a successful film career. He appeared in Herbert Wilcox's The Courtneys of Curzon Street (1947), playing a colonel alongside Anna Neagle, Michael Wilding and Daphne Slater; the film was a major success and became the best-selling film at the British box office of 1947. He developed a reputation for playing "solid, dependable characters such as policemen, serving officers or officials" in films such as The Fallen Idol (1948), The Third Man (1949), The Blue Lamp (1950), Last Holiday (1950), Cage of Gold (1950), Mr. Denning Drives North (1952), The Yellow Balloon (1953), Beat the Devil (1953), and Father Brown (1954), and commanders, colonels, or brigadiers in films such as Morning Departure (1950), Calling Bulldog Drummond (1951), Appointment with Venus (1951), and many more. In John Huston's Beat the Devil, Terence Pettigrew considers Lee to have been instrumental to the climax of the film, remarking that it was "left to Bernard Lee to inject a badly needed touch of earthiness at the end." In total, Lee appeared in over one hundred films during his career.
During the 1950s he had a long run on stage, appearing as Able Seaman Turner in Seagulls Over Sorrento, a role he later reprised in the film of the same name with Gene Kelly (released in the US as Crest of the Wave). In 1954 Lee starred opposite Gregory Peck in The Purple Plain, playing a Royal Air Force medical officer based in Burma during the late Second World War. In 1956 he portrayed Captain Patrick Dove in one of the most successful British films of that year, Michael Powell and Emeric Pressburger's war film The Battle of the River Plate, based upon the battle of the same name. He starred alongside John Gregson, Anthony Quayle and Peter Finch. George Lovell remarked that Captain Patrick Dove was played "ponderously by Bernard Lee, but he forms a much closer bond with the battleship's commander, Captain Langsdorff (Peter Finch)." The film was critically acclaimed, nominated for three BAFTA Awards in 1957, for "Best British Film", "Best British Screenplay" and "Best Film From Any Source", and was the fourth most popular film in Britain in 1957. Other films of this period include The Spanish Gardener (1956), Dunkirk (1958), Beyond This Place (1959), Whistle Down the Wind (1961), and The L-Shaped Room (1962).
In 1962 Lee was cast in the role that The Illustrated Who's Who of the Cinema thought would probably be his best remembered, playing the character of M, the head of the Secret Intelligence Service (MI6)—and the superior of James Bond—in the first Eon Productions film, Dr. No. A number of Bond scholars have noted that Lee's interpretation of the character was in line with the original literary representation; Cork and Stutz observed that Lee was "very close to Fleming's version of the character", whilst Rubin commented on the serious, efficient, no-nonsense authority figure. Smith and Lavington, meanwhile, remarked that Lee was "the very incarnation of Fleming's crusty admiral." One American newspaper, The Spokesman-Review, described Lee as "a real roast-beef-and-Yorkshire-pudding type of British actor." Murray Pomerance refers to Lee as a "paternal actor" in embodying this role. Terence Pettigrew, in his study British film character actors: great names and memorable moments agreed, noting that Lee was a "gruff, reliable, no-nonsense role character actor", with "kindly eyes, droll manner and expressly Anglo-Saxon level-headedness". In 1967 Lee appeared in O.K. Connery, a spoof of the James Bond film series which starred Connery's brother Neil Connery, Lois Maxwell (Miss Moneypenny), and several former actors of the series. During this period he also appeared in several ITC television productions such as The Baron, Man in a Suitcase, and Danger Man. In 1972 he portrayed Tarmut the sculptor in Terence Fisher's Hammer Horror picture Frankenstein and the Monster from Hell, alongside Peter Cushing, Shane Briant, and David Prowse; it was not released until 1974.
On 30 January 1972 Lee's first wife, Gladys Merredew, died in a fire at their seventeenth-century home in Oare, Kent which also left Lee hospitalised. According to actor Jack Warner, "Bernard and Gladys had a lovely seventeenth-century cottage in the Kent village of Oare, and it was there she died tragically in a fire early in 1972. Bernard and Gladys were trapped in their bedroom when the fire started on the ground floor. Bernard escaped through a window and ran to get a ladder in an attempt to rescue Gladys, but unhappily was unsuccessful. It was an awful end to a long and happy marriage." In February 1972 Lee was mugged and robbed by two youths. After the mugging and fire, Lee turned to drink, By chance Lee met Richard Burton in a pub, who, upon hearing of Lee's problems, gave him a cheque for $6,000 together with a note saying that everyone has a spot of trouble once in a while. Burton's gift assisted Lee in overcoming his depression. In 1975 both Lee and Lois Maxwell accepted roles in their usual Bond characters in the poorly received French James Bond spoof, From Hong Kong with Love.
Three years after the fire, Lee married television director's assistant Ursula McHale. Lee's first marriage produced a daughter, Ann, who also followed her father onto the stage, and did so with his blessing, Lee saying "She's doing what she wants to do and enjoying every moment of it." Ann later married Alan Miller, a stage actor and later a stage manager at the BBC: their son is the British actor Jonny Lee Miller. Lee's hobbies included golf, fishing, reading, music and sailing.
In November 1980 Lee was admitted to the Royal Free Hospital in London, suffering from stomach cancer. He died there on 16 January 1981, just six days after his 73rd birthday; his wife Ursula was present at his death. After his death, Ursula joined Exit (now Dignity in Dying) after witnessing Lee's suffering.
Lee died after filming had started on For Your Eyes Only, but before he could film his scenes as M. Out of respect for Lee, no replacement was found, and the script was re-written so that the character was said to be on leave. A year after Lee's death, Terence Pettigrew summarised his acting work as a "Gruff, reliable, no-nonsense role character actor, whose many credits include policemen, servicemen, father figures, and spy chiefs. Mostly shows the honest, hard-working face of officialdom, with only very occasional lapses." Lee was replaced in the role of M by Robert Brown who acted with Lee in The Spy Who Loved Me and Chitty Chitty Bang Bang.
From 1962 to 1979 Lee featured in eleven James Bond films as the character M, Bond's superior.