He was born Frederick Liedtke in York, Nebraska to a French mother and a father who had served as a captain in the American Civil War and was wounded at the Battle of Gettysburg. Using the stage name, Fred Niblo, Liedtke began his show business career performing in vaudeville and in live theater. After more than twenty years doing live performing, during which he traveled extensively around the globe, he turned to the burgeoning motion picture industry, making his first two films in Australia.

In 1901, Niblo married Broadway actress Josephine Cohan, the older sister of George M. Cohan. She died young in 1916, the year he began acting and directing motion pictures. While in Australia, he met actress Enid Bennett, whom he would later marry. As a Hollywood director, he is most remembered for several notable films beginning with his 1920 work The Mark of Zorro which starred Douglas Fairbanks. The following year he teamed up with Fairbanks again in The Three Musketeers and then directed Rudolph Valentino in Blood and Sand. In 1925, Niblo was the principal director of the epic Ben-Hur that was one of the most expensive films of the day but became the third highest grossing silent film in cinema history. Niblo followed up on this success with two major 1926 works, The Temptress starring Greta Garbo in her second film in America, and Norma Talmadge in Camille. Niblo went on to direct some of the greatest stars of the era including Joan Crawford, Lilian Gish, and Ronald Colman. In 1930 he directed his first talkie with two of the biggest names in show business, John Gilbert and Renée Adorée in a film titled Redemption.

Fred Niblo retired in 1933 after more than forty years in show business. The last years sixteen were used to make more than forty films, most of which were feature length projects. He was an important personality in the early years of Hollywood and was one of the original founders of the Academy of Motion Picture Arts and Sciences. In recognition of his role in the development of the film industry, he has a star on the Hollywood Walk of Fame at 7014 Hollywood Blvd. His Ben-Hur film has been selected for preservation in the United States National Film Registry.

Fred Niblo died in New Orleans, Louisiana and is interred in Forest Lawn Memorial Park Cemetery in Glendale, California. His son with Josephine Cohan, Fred Niblo, Jr. (1903-1973) was a successful Hollywood screenwriter.