Douglas is the elder son of actor Michael Douglas and of Diandra Morrell Douglas (née Luker, whom Michael Douglas divorced in 1995), and grandson of actor Kirk Douglas and Bermudian actress Diana Dill. He has appeared in four films: Jackie Chan's Mr. Nice Guy (1997), It Runs in the Family (2003), National Lampoon's Adam & Eve (2005) and Loaded (2008). In It Runs in the Family he appeared together with his father, Michael Douglas, grandfather, Kirk Douglas, and grandmother, Diana Dill.
Douglas has been arrested for drug offenses at least three times. In 1999 he was found with cocaine in Manhattan and was arrested and charged with a misdemeanor possession of a controlled substance. The charge was dropped after he pleaded guilty to the lesser charge of disorderly conduct. In 2007 he was charged with felony possession of a controlled substance after police officers found a syringe with liquid cocaine in a car he was in. On July 28, 2009, Douglas was arrested by the Drug Enforcement Administration for possession of 0.5 pounds (0.23 kg) of methamphetamine. Due to the large amount of the drug seized, Douglas was charged with intent to distribute. The charge carries a minimum prison sentence of 10 years and a maximum of life.
On January 27, 2010, Douglas pleaded guilty to both conspiracy to distribute drugs and to heroin possession after his girlfriend had smuggled heroin hidden inside an electric toothbrush and passed it on to him while he was under house arrest.
On April 20, 2010, Douglas was sentenced to five years in prison for both possessing heroin and dealing large amounts of methamphetamine and cocaine out of a New York hotel room. Michael Douglas publicly assumed blame for "being a bad father" but said that without prison intervention, Cameron "was going to be dead or somebody was gonna kill him. I think he has a chance to start a new life, and he knows that."
In October 2011 Douglas pleaded guilty to possessing drugs in prison. On December 21, 2011, he was sentenced to an additional 4-1/2 years in prison for this charge. On April 15, 2013, this extended prison sentence was confirmed by the 2nd U.S. Circuit Court of Appeals.
In December 2012 he had his leg broken by another inmate.
In January 2013 Douglas was again found to have drugs in his system while in prison in Loretto, Pennsylvania. He failed a urinalysis and was sent to segregated housing.
In April 2013 Douglas lost an appeal to have his sentence reduced.
On August 1, 2016, Douglas was released early from prison and transferred to a halfway house in New York City after seven years behind bars, with two of the seven years in solitary confinement. Cameron Douglas is planning to write a tell-all book about his experiences after being convicted on drug charges, according to Page Six, New York Post which first had word of the 37-year-old's release.
Douglas is currently living at the GEO Care halfway house in The Bronx and working at a film production company in Manhattan.
Cameron Douglas has set up an account on Instagram, where his first post — an image of the phrase “Be the energy you want to attract”.