Margaret Rutherford was born in Balham in South London to a deeply troubled family. Her father William Rutherford Benn, a journalist and poet, had murdered his own father, been declared insane, and confined to Broadmoor Criminal Lunatic Asylum. He was released from Broadmoor in 1890 and dropped his surname. He then took his wife and young Margaret to live in India. She was sent back to Britain at age three to live with her aunt Bessie Nicholson in Wimbledon and told that her father was dead. Her mother committed suicide. At age 12, Margaret learned that her father was still alive and had in fact been readmitted to Broadmoor, where he remained until his death in 1921. She was educated at Wimbledon High School and at boarding school. She developed an interest in the theater, took acting lessons, and performed in amateur dramatics. When her aunt Bessie died, she left money that helped Margaret pay for drama training at the Old Vic School. She supported herself as a piano teacher and as an elocution teacher. She made her stage debut at the Old Vic in 1925 and soon established herself as a talented and beloved comic actress. One of her most famous roles was as Miss Prism in John Gielgud's production of The Importance of Being Earnest in 1939. In 1941, she received rave reviews as Madame Arcati in Noël Coward's Blithe Spirit, a role she reprised in David Lean's 1945 film version of the play. Other famous film roles included Professor Hatton Jones in Passport to Pimlico (1949), Miss Prism in the 1952 film adaptation of The Importance of Being Earnest, and Aunt Dolly in I'm All Right Jack (1959).
In 1963, she won an Academy Award and Golden Globe as Best Supporting Actress for her performance as the Duchess of Brighton in The VIPs. Between 1961 and 1964, she portrayed Miss Jane Marple in a series of four films based on the novels of Agatha Christie. In 1945, at age 53, she married Stringer Davis, a character actor 7 years her junior with whom she appeared in many productions. He nursed her through periodic episodes of depression, which sometimes involved stays in psychiatric hospitals and electric shock treatment. She was made a Dame of the Order of the British Empire in 1967.