Gottfried Reinhardt was born in Berlin, the son of the Austrian theater director Max Reinhardt, manager of the Deutsches Theater, and his first wife Else Heims. Gottfried attended the Französisches Gymnasium Berlin and began his career as an actor and director at his father's stage.

In 1932, he went on a study visit to the US, where he remained after the Nazi Machtergreifung in Germany on January 30, 1933. In Hollywood, he became assistant director of Ernst Lubitsch, later a production assistant at the Metro-Goldwyn-Mayer studios, contributing to the making of the 1938 film The Great Waltz. In 1941 he produced Two-Faced Woman starring Greta Garbo in her final film role.

A naturalized American, he served in the United States Army in World War II and made documentaries for the Army Signals Corps along with Carl Laemmle Jr. and a cast of other filmmakers and writers. The Signal Corps division was mainly responsible for making military training and propaganda films.

He resumed his career as producer or associate producer with MGM after 1945, including A-grade films like Command Decision (1948) and The Red Badge of Courage (1951). Reinhardt gave his debut as a director with Invitation in 1952. Two years later he worked in West Germany; his film version Before Sundown of Gerhart Hauptmann's drama Vor Sonnenuntergang starring Hans Albers won the Golden Bear (Audience award) at the 6th Berlin International Film Festival. He was also known for Before Sundown (1956), Town Without Pity (1961) and Betrayed (1954). In the early 1960s, Reinhardt worked as an independent producer/director, in both Europe and in the U.S. He also directed for the stage in Salzburg, Austria.

He was married to Silvia Hanlon Shapiro and was the stepfather of U.S. federal judge Stephen Reinhardt. He died on July 19, 1994 in Los Angeles, California, USA.