Born in Mountain View, Arkansas, Powell started his entertainment career as a singer. He was signed by Warner Bros in 1932 and made his film debut as a singing bandleader in Blessed Event. He went on to star as a boyish crooner in movies such as 42nd Street, Footlight Parade, Gold Diggers of 1933, Flirtation Walk, and On the Avenue, often appearing opposite Ruby Keeler.
In 1944 he abruptly switched to noir detective roles, first starring as Philip Marlowe in Murder, My Sweet. He became a popular tough-guy lead, appearing in movies such as Cornered, Johnny O'Clock, and The Tall Target. Even when he appeared in lighter fare such as The Reformer and the Redhead and Mrs. Mike, he never sang in his later roles.
In the 1950s Powell produced and directed several B-movies and was one of the founders of Four Star Television, appearing in and supervising several shows for that company.
Powell died on January 2, 1963 of stomach cancer, one of many of the cast and crew of the 1956 movie , The Conqueror, who died of the disease. The Conqueror had been filmed in Utah near an atomic test site. Powell was buried at Forest Lawn Memorial Park Cemetery.
Powell's first wife, from 1925 until 1932, was Mildred Maund. His second wife, from 1936 until 1945, was Joan Blondell (née Rose Joan Blondell), with whom he had two children, Ellen Powell and Norman S. Powell. His third wife, from 1945 until his death, was June Allyson (née Ella Geisman), with whom he had two children, Pamela (adopted) and Richard.