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Crowe was born in Wellington, New Zealand, the son of Jocelyn Yvonne (née Wemyss) and John Alexander Crowe, both of whom were movie set caterers; his father also managed a hotel. Crowe's maternal grandfather, Stan Wemyss, was a cinematographer who, according to Crowe, produced the first film by New Zealander Geoff Murphy, and was also named an MBE for filming footage of World War II. Crowe's maternal great-great grandmother was Māori, and as a result Crowe is registered on the Māori electoral roll in New Zealand; Crowe also has Welsh, Scottish, Norwegian, English and Irish ancestry.Two of Russell Crowe's cousins, Martin and Jeff Crowe are former New Zealand national cricket captains.

When Crowe was four years old, his family moved to Australia, where his parents pursued a career in film set catering. The producer of the Australian TV series Spyforce was his mother's godfather, and Crowe at age five or six was hired for a line of dialogue in one episode, opposite series star Jack Thompson, who years later played Crowe's father in The Sum of Us and who coincidentally had been educated at the same school which Crowe was to attend for two years: Sydney Boys High School.

From his youth to the present, Crowe has had a special love of horses. "They're just like people," he told CraveOnline, "there are some horses that you have a deeper connection with immediately, and you can work on that over time." He has also noted that he sometimes finds it difficult to part with his equine co-stars when a film wraps.

When he was 14, Crowe's family moved back to New Zealand, where he (along with his brother Terry) attended Auckland Grammar School with his cousins Martin Crowe and Jeff Crowe. He then continued his secondary education at Mount Roskill Grammar School, which he left at age 16 to chase his dreams of becoming a musician or actor.

In the mid-1980s Russell, under guidance from his good friend Tom Sharplin, performed as a rock 'n' roll revivalist, under the stage name Russ Le Roq, and had a New Zealand single with "I Wanna Be Marlon Brando." In 1986 he was given his first professional role by director Daniel Abineri in a production of The Rocky Horror Show. He played the role of Eddie/Dr Scott. He repeated this performance in a further Australian production of the show. In the 1988 Australian production of Blood Brothers, Crowe played the role of Mickey.He was also cast again by Daniel Abineri in the role of Johnny in the stage musical of Bad Boy Johnny and the Prophets of Doom in 1989.

Crowe returned to Australia at age 21, intending to apply to the National Institute of Dramatic Art. "I was working in a theater show, and talked to a guy who was then the head of technical support at NIDA," Crowe recalled. "I asked him what he thought about me spending three years at NIDA. He told me it'd be a waste of time. He said, 'You already do the things you go there to learn, and you've been doing it for most of your life, so there's nothing to teach you but bad habits.'"[8] In 1987 Crowe spent a six-month stint as a busker when he couldn't find other work.

After appearing in the TV series Neighbours and Living with the Law, Crowe was cast in his first film, The Crossing (1990), a small-town love triangle directed by George Ogilvie. Before production started, a film-student protegé of Ogilvie's, Steve Wallace, hired Crowe for the film Blood Oath (1990) (aka Prisoners of the Sun) which was released a month earlier, although actually filmed later. In 1992, Crowe starred in the first episode of the second series of Police Rescue. Also in 1992 Crowe starred in Romper Stomper, an Australian film which follows the exploits and downfall of a racist skinhead group in blue-collar suburban Melbourne, directed by Geoffrey Wright.

After initial success in Australia, Crowe began acting in American films. He first co-starred with Denzel Washington in Virtuosity in 1995. He went on to become a three-time Oscar nominee, winning the Academy Award as Best Actor in 2001 for Gladiator. Crowe wore his grandfather Stan Wemyss's Member of the Order of the British Empire medal to the ceremony.

Crowe received three consecutive best actor Oscar nominations for The Insider, Gladiator and A Beautiful Mind. Crowe won the best actor award for A Beautiful Mind at the 2002 BAFTA award ceremony. However he failed to win the Oscar that year, losing to Denzel Washington. It has been suggested that his attack on television producer Malcolm Gerrie for cutting short his acceptance speech may have turned voters against him.

All three films were also nominated for best picture, and both Gladiator and A Beautiful Mind won the award. Within the six year stretch from 1997-2003, he also starred in two other best picture nominees, L.A. Confidential and Master and Commander: The Far Side of the World, though he was nominated for neither. In 2005 he re-teamed with A Beautiful Mind director Ron Howard for Cinderella Man. In 2006 he re-teamed with Gladiator director Ridley Scott for A Good Year, the first of two consecutive collaborations (the second being American Gangster co-starring again with Denzel Washington, released in late 2007). While the light romantic comedy of A Good Year was not greatly received, Crowe seemed pleased with the film, telling STV in an interview that he thought it would be enjoyed by fans of his other films.

On 9 March 2005, Crowe revealed to GQ magazine that Federal Bureau of Investigation agents had approached him prior to the 73rd Academy Awards on 25 March 2001 and told him that the Islamist terrorist group al-Qaeda wanted to kidnap him. Crowe told the magazine that it was the first time he had ever heard of al-Qaeda (the September 11 attacks took place later that year) and was quoted as saying:

"You get this late-night call from the FBI when you arrive in Los Angeles, and they're, like, absolutely full-on. 'We’ve got to talk to you now before you do anything. We have to have a discussion with you, Mr Crowe.'" Crowe recalled that "it was something to do with some recording picked up by a French policewoman, I think, in either Libya or Algiers...it was about taking iconographic Americans out of the picture as a sort of cultural-destabilization plan".

Crowe was guarded by Secret Service agents for the next few months, both while shooting films and at award ceremonies (Scotland Yard also guarded Crowe while he was promoting Proof of Life in London in February 2001).