Donovan was born in Tenafly, New Jersey, to John Timothy Donovan, a surgeon, and Eileen Frances (née McAllister), both Roman Catholics of Irish descent. Donovan is the youngest of seven children. He attended Dwight-Englewood School in Englewood, New Jersey, before transferring to Tenafly High School and attending the University of Southern California. He appeared on television since his teenage years.
Donovan's earliest film roles included Kevin Donaldson in SpaceCamp (1986), a recovering drug addict in Clean and Sober (1988), 1st Lieutenant Luke Sinclair in Memphis Belle (1990) and Paul Matthews in Love Potion No. 9 (1992). Later, he played Bob Anders, one of the key supporting roles in Argo (2012).
Donovan portrayed Joshua, the boyfriend of Rachel Green, on several episodes of Season 4 of Friends. He later portrayed the priest-son of a large Catholic family in Trinity (1998). He has appeared as a guest star in several television series, such as Magnum, P.I. (1986), The Guardian (2001), Mister Sterling (2003), Exposed (2003), and The O.C. (2003), where he appeared as Jimmy Cooper. From 2007-10, he portrayed Tom Shayes on Damages. In 2005, Donovan began directing episodic television when he directed an episode of The O.C.. In 2007 he guest starred on a season 6 episode of Law & Order: Criminal Intent. In 2009, he directed an episode of the sixth season of Medium. He also directed two episodes of Damages in its third season and an episode of Nip/Tuck in its sixth season. In 2010, Donovan directed the third episode in the sixth season of Weeds, the tenth episode in the fourth season of Gossip Girl, the fourth episode of the fifth season, and one episode of Damages from the third season. In 2011, Donovan directed the Valentine's Day-themed episode of Glee and the episode "I Kissed a Girl" in the third season. In March 2010, he joined the cast of No Ordinary Family. However, after only one season, the series was cancelled. Recently, Donovan guest appeared in the series, Red Oaks.
Donovan starred on stage with Amy Ryan in the Los Angeles production of Rabbit Hole. On Broadway, he played Alan Seymour in the revival of Picnic in 1994 and with Judi Dench in Amy's View (1999). Off Broadway, Donovan appeared with Glenn Fitzgerald in the 2001 production of Lobby Hero by Kenneth Lonergan, playing the role of the crooked cop Bill. Donovan has appeared in numerous productions at the Williamstown Theater Festival, including Once in a Lifetime, Under the Blue Sky, and The Glass Menagerie. He has also appeared at the Irish Repertory Theater in New York City. In 2011, he starred with Frances McDormand in the world premiere of David Lindsay-Abaire's play Good People at the Manhattan Theatre Club.
Donovan had a regular gig with traditional Irish band the Descendants, with whom he released an album titled Wake Amusements. He plays the bodhrán and fiddle.
As of May 2011, Donovan voices radio and video advertising for PNC Financial Services and volunteers with the Young Storytellers Program.
Donovan was formerly in relationships with Sandra Bullock in 1994 and Jennifer Aniston in 1997: he had been engaged to both. He later married writer Corinne Kingsbury in a Catholic ceremony on a Malibu, California beach in 2005. However, they were divorced in 2008.
In 2008, Donovan announced his support and campaigned for Barack Obama in the U.S. presidential election of 2008. Donovan supported Obama for re-election in the 2012 presidential election.