Born John Sidney Alcott in Toronto, Ontario, he became one of the first great directors of the motion picture business. With a desire to be an actor, a young Sidney Olcott went to New York City where he worked in the theater until 1904 when he performed as a film actor with the Biograph Studios. Within a short time he was directing films and became a general manager at Biograph.

In 1907, Frank Marion and Samuel Long, with financial backing from George Kleine, formed a new motion picture company called the Kalem Company and were able to lure the increasingly successful Sidney Olcott away from Biograph. Olcott was offered the sum of ten dollars per picture and under the terms of his contract, Olcott was required to direct a minimum of one, one-reel picture of about a thousand feet every week. After making a number of very successful films for the Kalem studio, including "Ben Hur" (1907) with its dramatic chariot race scene, Olcott became the company's president and was rewarded with one share of its stock.

In 1910 Sidney Olcott demonstrated his creative thinking when he made Kalem Studios the first ever to travel outside the United States to film on location. Of Irish ancestry, and knowing that in America there was a huge built-in Irish audience, Olcott went to Ireland where he made a film called "A Lad from Old Ireland." He would go on to make more than a dozen films there and later on only the outbreak of World War I prevented him from following through with his plans to build a permanent studio in Beaufort, County Kerry.

The Irish films led to him taking a crew to Palestine in 1912 to make the first five-reel film ever, titled "From the Manger To the Cross," the life story of Jesus. The film concept was at first the subject of much skepticism but when it appeared on screen, it was lauded by the public and the critics. Costing $35,000 to produce, "From the Manger to the Cross" earned the Kalem Company profits of almost $1 million, a staggering amount in 1912. The motion picture industry acclaimed him as it greatest director and the film influenced the direction many great filmmakers would take such as D.W. Griffith and Cecil B. DeMille. "From the Manger to the Cross" is still shown today to film societies and students studying early film making techniques. In 1998 the film was selected for the National Film Registry of the United States Library of Congress.

Despite making the studio owners very rich men, they refused to increase his salary beyond the $150 a week he was then earning. From the enormous profits made for his employers, Olcott's dividend on the one share they had given him amounted to $350. As a result, Sidney Olcott resigned and took some time off, making only an occasional film until 1915 when he was encouraged by his Canadian friend Mary Pickford to join her at Famous Players (later Paramount Studios). The Kalem Company never recovered from the mistake of losing Olcott and a few years after his departure, the operation was acquired by Vitagraph Studios in 1916.

Olcott was a founding member of the East Coast chapter of the Motion Picture Directors Association, a forerunner to today's Directors Guild of America and would later serve as its president. Like the rest of the film industry, Sidney Olcott moved to Hollywood, California, where he directed many more successful and acclaimed motion pictures with the leading stars of the day.

Olcott married actress Valentine Grant, the star of his 1916 film, "The Innocent Lie."

During World War II, Olcott opened his home to visiting British Commonwealth soldiers in Los Angeles. In his book titled Stardust and Shadows: Canadians in Early Hollywood, writer Charles Foster tells of this period in Olcott's life, and of how he was introduced to many members of Hollywood's Canadian community through Olcott. Sidney Olcott died in Hollywood, California.