Spiegel was born to a Jewish family in Jarosław, Galicia, Austria-Hungary (now in Poland). His parents were Regina and Simon Spiegel (a tobacco wholesaler). He received his education at the University of Vienna. His brother was Shalom Spiegel, a professor of medieval Hebrew poetry.
Spiegel worked briefly in Hollywood in 1927 following a stint serving with Hashomer Hatzair in Palestine. He then went to Berlin to produce German and French adaptations of Universal films until 1933 when he fled Germany. As an independent producer, Spiegel helped produce a number of European films.
In 1938, he immigrated to Mexico and subsequently the United States.
Between 1935 and 1954, Spiegel billed himself as S. P. Eagle; after that he used his real name. His nickname was the "velvet octopus" after his propensity to entwine himself with women in the back of taxi cabs and manage Hollywood with a velvet touch according to Billy Wilder. He loved London and admired the British, as is reflected with his greatest movies The Bridge on the River Kwai (1957) and Lawrence of Arabia (1962), which won seven Academy Awards including Best Picture, while The Bridge on the River Kwai won seven, including Best Picture. Starting with the 1951 film The African Queen, he produced films through his British-based production company Horizon Pictures. Spiegel was embraced by the British as one of theirs, living in Central London, yet remained feared by Hollywood for his talent, style, and womanizing.
In a review in Variety of a Natasha Fraser-Cavassoni's biography of Spiegel, Wendy Smith notes: "It's all here: the sleazy financial maneuvers and creepy taste for underage girls that make Spiegel a decidedly flawed protagonist, as well as the wit, sophistication, and Old World charm that make him a titanic figure the likes of which the movie industry will not see again"
Spiegel won the Academy Award for Best Picture for Elia Kazan's On the Waterfront and a further two times for his two collaborations with British director David Lean, The Bridge on the River Kwai (1957) and Lawrence of Arabia (1962). In 1963, he was awarded the prestigious Irving Thalberg Memorial Award at that year's Academy Awards for his many contributions to cinema.
American actress Theresa Russell alleged that she was sexually propositioned by Spiegel during her first casting session for his 1976 film The Last Tycoon. In another interview, Russell recalled: "I was 16 years old and still living at home, and he took me to the Bistro and tried to stick his tongue down my throat." After she refused to sign a contract with Spiegel, Russell "was completely left out of the publicity for [The Last Tycoon]", and Spiegel threatened that he would prevent Russell from working again in Hollywood.
In 2015, English actress Lesley-Anne Down discussed her experiences of sexual harassment by Spiegel in the 1970s, recalling: "I went up to his suite, and before I’d even said hello, he’d stuck his tongue in my mouth. He then shoved some perfume in my hand and invited me to come in. There was a little bit of being chased around the tables in the room, but I never actually did the deed. Nowadays, actresses are protected by an entourage, but back then, we weren’t. I can’t ever remember going for a meeting and not expecting something to occur."
Spiegel maintained a connection with the Israeli nation throughout his life, particularly with such personalities as Golda Meir, Ariel Sharon, Jerusalem Foundation president Ruth Cheshin (mother of Mishael Cheshin), and his close friend, then Jerusalem Mayor Teddy Kollek. Spiegel also contributed to various Zionist causes. He spoke seven languages fluently: English, French, German, Italian, Spanish, Hebrew and Polish.
Spiegel's heirs and the administrators of his estate, son Adam Spiegel, daughter Alisa Freedman, niece Judge Raya Dreben, and Adv. David Bottoms, decided to transfer Spiegel's impressive art collection to the Israel Museum in Jerusalem. Since 1996, they have made an annual contribution, through the Jerusalem Foundation, to the film school in Jerusalem bearing his name since that time — the Sam Spiegel Film and Television School, Jerusalem. This annual contribution is the largest in the history of Israeli cinema.
In 2005, the 15th anniversary of the establishment of the Sam Spiegel Film and Television School, the Jerusalem Municipality complied with a request from the school's founder-director Renen Schorr to mark the occasion by declaring the lane in the Talpiot industrial section where the school is located "The Sam Spiegel Alley." The street sign's inscription: "Sam Spiegel – Jewish-American Film Producer and Oscar-winner. Pioneer. Lover of Zion."