He was born in Rotherhithe, South London to Maurice Micklewhite, a Catholic fish-porter, and Ellen Maria, a Protestant charlady. He grew up in nearby Camberwell and, during World War II, was evacuated to Norfolk. When he first became an actor he used the stage name "Michael Scott". He happened to be speaking to his agent in a telephone box in Leicester Square in London when he was informed that he had to change his name again because another actor was already using the name "Michael Scott". His agent insisted that he come up with a new name immediately. Looking around for inspiration, he noted that was being shown at the Odeon cinema, and so he decided to change his name to "Michael Caine". He once joked to an interviewer that had he looked the other way, he would have ended up as "Michael One Hundred and One Dalmatians".

After several minor roles, Caine came into the public eye as an upper-class British army officer in the 1964 film, . This proved to be paradoxical, as Caine was quickly to become notable for using a regional accent, rather than the Received Pronunciation hitherto considered proper for film actors. At the time, Caine's working-class cockney, just as with The Beatles' Liverpudlian accents, seemed like a breath of fresh air. (1966). He went on to play Palmer in a further two films. His trademark horn-rimmed glasses did not prevent him becoming a pin-up. After ending the 1960s with the equally iconic , one of the best British gangster films. The 1970s proved to be a lean period for Caine, with successes such as (1979).

Throughout the 1980s and early 1990s Caine alternated between acclaimed performances in films such as (1994). Of the former, Caine famously said "I have not seen the film, but I hear it is terrible. However, I have seen the house that it paid for, and it is superb". By this time Caine's reputation as an icon was assured, and recent performances in (2002) and others have rehabilitated his critical reputation. Several of Caine's classic films have been remade to appeal to new, younger audiences, including . He played the role of Nigel Powers in Austin Powers in Goldmember and recently appeared as Bruce Wayne, in both cases as a supporting actor. He was made a Commander of the British Empire (CBE) in 1993 for services to drama, and in 2000 a Knight Bachelor, becoming . Unlike some actors who adopt their stage name for everyday use, Caine still uses his real name when he is not working.

Caine is a popular subject for impressionists and mimics, having a distinctive yet fairly easy to copy voice. Most Caine impressions repeat the catchphrase, "Not a lot of people know that," which was never actually used by Caine, except more recently when sending up himself and the mimics who established the catchphrase; it originated with an answering machine message recorded by Peter Sellers, who impersonated Caine very well and in this case did so saying, "My name is Michael Caine. Peter Sellers is not in at the moment. Not a lot of people know that."

He also appeared as himself on the hit Madness song "Michael Caine" in 1984.

Caine has been married twice:

Some time after his mother died, Caine and his younger brother learned they had an elder half-brother, named David. He suffered from severe epilepsy and had been kept in hospital his entire life. Although their mother regularly visited her first son in hospital, even her husband did not know the child existed.

December 2005 saw the British press, speculating that Sir Michael Caine has been offered a million pounds to appear in future episodes of the British soap EastEnders as a character which was recently offered to David Essex, but the role went to Nicky Henson.