Before his acting career started, Butterworth served as a lieutenant in the Royal Navy Fleet Air Arm during the Second World War. While flying in an attack on the Dutch coast off Den Helder in 1940 his Fairey Albacore was shot down by Messerschmitt Bf 109s killing one crew member and wounding the other. After a forced landing on the island of Texel he was captured becoming a prisoner of war (POW). Sent to the Dulag Luft POW transit camp, at Oberursel near Frankfurt, he later escaped in June 1941 through a tunnel, covering 27 miles (43 km) over three days before a member of the Hitler Youth captured him. Afterwards he joked that he could never work with children again. Two other attempts to escape were made during his time there but he never got beyond the camp grounds. He was subsequently sent to Stalag Luft III, near Sagan, the scene of The Great Escape.
Whilst at Stalag Luft III he met Talbot Rothwell, who later went on to write many of the Carry On films in which Butterworth was to star. Rothwell and Butterworth formed a duet and sang in the camp shows, where booing and catcalls covered the sounds of an escape tunnel being dug by other prisoners. Butterworth was one of the vaulters covering for the escapers during the escape portrayed by the book and film The Wooden Horse. Butterworth later auditioned for the film in 1949 but "didn't look convincingly heroic or athletic enough" according to the makers of the film.
Having never performed in public before, Butterworth sang a duet with Rothwell, a song which Rothwell called "The Letter Edged In Black". The performance was followed by some comic repartee which, according to his own account, provoked enough boos and hisses to have the desired effect of drowning out the escape party. After the war, Butterworth kept a photo of the concert party line-up, something which offered inspiration to him when starting a career in acting.
Also within the same camp as Butterworth and Rothwell were the future actors Rupert Davies and Stratford Johns and John Casson, who was the son of Lewis Casson and Sybil Thorndike. All five remained very close friends after the war ended and they all appeared on This Is Your Life when Butterworth was featured in 1975.
Butterworth came to notice after appearing in pantomime around the UK. His first film appearance was in the Val Guest film William Comes to Town (1948). Guest and Butterworth became close friends and the two worked on a further seven films together during their careers. His first major success was on television in the Terry-Thomas sketch show How do you view? in which he played the chauffeur "Lockitt". Butterworth also presented successful programmes aimed at children in the 1950s including Whirligig and Butterworth Time. He continued to take minor parts in films and went on to appear alongside actors including Sean Connery, David Niven and Douglas Fairbanks Jr during his career. Around the time his work in the Carry On films began, he guest appeared in two First Doctor Doctor Who stories, starring William Hartnell, in 1965/66, (The Time Meddler and The Daleks' Master Plan), playing the Meddling Monk.
Butterworth's association with the Carry On series began with Carry On Cowboy (1965) playing the part of "Doc". He was put in touch with the creator of the series, Peter Rogers, by his friend Talbot Rothwell, the writer of Carry On Cowboy and who had written the previous four films. Out of the actors who were considered to be the Carry On team, he was the sixth most prolific performer in the series, making sixteen film appearances, two Christmas specials, the television series in 1975 and the west end theatre productions which also toured the country, alongside Sid James, Barbara Windsor and Kenneth Connor.
His Carry On appearances portrayed his characters as typically quiet and subtly eccentric. He was often cast as a stooge for another character. In Carry on Screaming! he played Detective Constable Slowbotham, the assistant for Detective Sergeant Bung (Harry H. Corbett), or as Citizen Bidet in Don't Lose Your Head where he was the assistant to Citizen Camembert (Kenneth Williams). In Carry On Camping, where he played Joshua Fiddler, the laid back and eccentric camp site manager, who persuades Sid James character to part with most of his money when booking into the camp site. Such was his loyalty to Peter Rogers and Gerald Thomas, that Butterworth agreed to play three small roles, in Carry On Again Doctor, Carry On Loving and Carry On Henry. It was agreed that, due to other working and stage commitments, he was unable to take larger parts, and so he was specially written into the films in roles given to him.
Butterworth returned to playing more substantial parts within the Carry On films with Carry On Abroad (1972), in which he played 'Pepe' the manager of an unfinished hotel, who greets his unexpected guests in the guise of the builder, the porter, the receptionist and telephone operator. He spends the first half of the film furiously trying to placate and accommodate them and the last half desperately trying to save the building from a flood, and whilst all this is going on, put up with his nagging wife (Hattie Jacques). Butterworth remained with the series until the final film in the main series, Carry On Emmannuelle (1978).
Having appeared in many of Val Guest's films during the beginning of his career, he also made three appearances in the films of Richard Lester. He appeared in Lester's film version of A Funny Thing Happened on the Way to the Forum (1966). A decade later, he appeared consecutively in The Ritz and Robin and Marian (both 1976) alongside Sean Connery, Richard Harris and Audrey Hepburn. He had an uncredited cameo part in the film version of the musical Oliver! (1968) as a shopkeeper in court, and made a special appearance in an episode of Catweazle ("The Demi Devil" (1970)), and the Dad's Army episode "The Face on the Poster" (1975).
In 1975 he was the subject of an episode of This Is Your Life whereby Eamonn Andrews surprised him while he was shopping in Selfridges, London. Friends who took part in the show included Terry Scott, Talbot Rothwell, Jimmy Jewell, John Casson and Rupert Davies. Butterworth's wife and their two children, Tyler and Emma were also at the recording. When the Carry on films finished in 1978, Butterworth began to concentrate on straight roles, taking a small part in the feature film The First Great Train Robbery with Sean Connery, and the Alan Bennett play "Afternoon Off" (both 1979). These two productions were shown posthumously.
Butterworth was introduced to actress and impressionist Janet Brown by Rothwell and the two married in 1946 at St Mary's, Bryanston Square, Marylebone, after being introduced by Rothwell. Brown later became known for her television impersonations of Margaret Thatcher during the 1970s and 1980s. Their son Tyler Butterworth is an actor and is married to the actress Janet Dibley. The couple also had a daughter, Emma (1962–1996), who died aged 34.
In 1979, whilst The First Great Train Robbery was on general release, Butterworth was starring as Widow Twankey in the pantomime Aladdin at the Coventry Theatre. When the show had finished, he went back to his hotel following the evening's performance. His failure to return for the following day's matinee show caused alarm, and he was found dead in his room from a heart attack. The remainder of the pantomime's run was cancelled as a mark of respect. Butterworth was buried in Danehill Cemetery, in East Sussex. Following his death, the producer of the Carry On Films, Peter Rogers, said that Butterworth was "a thoroughly nice bloke and a dear friend".