Relationship troubles between Lon and Cleva became apparent and in April of 1913, she went to the Majestic Theater in downtown Los Angeles, where Lon was managing the Kolb and Dill show, and attempted to commit suicide by swallowing Bichloride of Mercury. The attempt failed, and it ruined her singing career, but the scandal of the event and ensuing divorce forced Chaney out of the theater and into movies, to which he had worked as bit parts as far back as 1912.

Chaney is chiefly remembered as a pioneer in such horror films as (the silent versions of) The Hunchback of Notre Dame and most notably The Phantom of the Opera. His ability to transform himself without sophisticated make-up techniques earned him the nickname of "Man of a Thousand Faces". He also appeared in several films by director Tod Browning, often playing disguised or mutilated characters (or both), including carnival knife thrower Alonzo the Armless in The Unknown (1927) with Joan Crawford. His last film was The Unholy Three (1930) and was his only "talkie". In 1927 Chaney starred alongside Conrad Nagel, Marceline Day, Henry B. Walthall and Polly Moran in the now lost Tod Browning directed horror classic London After Midnight. The film is quite possibly the most famous and talked about lost film ever.

Although Chaney created, in Quasimodo the hunchback and Erik the opera phantom, two of the most grotesquely deformed characters in the history of film, his portrayals deliberately sought to elicit a degree of sympathy and pathos among those viewers not overwhelmingly terrified, or repulsed, by their disfigurement. These were "monsters" created by a cruel hand of fate - not by their own action - and shunned and hated by everyday people.

"He was someone who acted out our psyches. He somehow got into the shadows inside our bodies; he was able to nail down some of our secret fears and put them on-screen," the writer Ray Bradbury once explained. "The history of Lon Chaney is the history of unrequited loves. He brings that part of you out into the open, because you fear that you are not loved, you fear that you never will be loved, you fear there is some part of you that's grotesque, that the world will turn away from."

During the filming of Thunder in 1929, Chaney developed pneumonia. His condition gradually worsened, and the following year he died of a throat hemorrhage resulting from throat cancer, and he was interred in the Forest Lawn Memorial Park Cemetery, in Glendale, California.

Lon Chaney has a star on the Hollywood Walk of Fame and in 1994, he was honored with his image on a United States postage stamp designed by caricaturist Al Hirschfeld.