Chéreau first captured attention for his daring work as a director of operas and plays. The film adaptation of Alexandre Dumas's historical novel Queen Margot (La Reine Margot, 1994) established Chéreau as a leading cinema director as well, though his first film was La Chair de l'Orchidée (The Flesh of the Orchid, 1975), which earned him two César (French Academy Award) nominations.

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Chéreau was born in Lézigné, in the western French region of Maine-et-Loire, on November 2, 1944. His parents were both artists. He attended school in Paris at lycée Louis-le-Grand.

As a teenager he was discovered by Paris theater critics as a result of his work as director, actor, and stage-manager of his high school theater.

He directed his first professional play when he was 19; it was so successful that he abandoned his studies at the Sorbonne to pursue a career in theater. He was celebrated as a theater prodigy and soon became associated with important European theaters.

He became the director of Sartrouville Theater in the outskirts of Paris in 1966 and worked for the Piccolo Teatro in Milan in the early 1970s. From 1971 to 1977 he co-directed with Roger Planchon the National Popular Theatre in Villeurbanne, near Lyon, where he revived classic French plays by Labiche, Molière, Marivaux, and Genet.

Although he directed his first opera in 1966, the operatic productions that established him as an international opera director were his interpretations of Wagner's Ring tetralogy for the one hundredth anniversary of the Bayreuth Festival, 1976-1980. Recruited by conductor Pierre Boulez, Chéreau's version of the operas moved the action to the Industrial Revolution of the nineteenth century, framing realistic details within an hyperrealist context that challenged their verisimilitude and made them part of a psychic landscape.

Although the productions angered Wagner purists—there were near riots at Bayreuth—they are now regarded as classics. Chéreau's mise-en-scène became an important point of reference for directors interested less in literal adaptations than in avant-garde transpositions in an attempt to render dated operas relevant to modern sensibility.

In 1979, Chéreau again worked with Boulez, this time on a Paris production of Alban Berg's opera Lulu. Since then he has directed operas at most of the leading European houses, most recently a 2007 production of Tristan und Isolde at Teatro alla Scala.

In 1982 Chéreau became Director of the Théâtre des Amandiers at Nanterre, which he developed into one of France's leading theaters despite its rather remote location. Among his notable productions there were Genet's Les Paravents (1983) and Shakespeare's Hamlet (1989).

In his films, which include Wounded Man (L'homme blessé, 1983), Those Who Love Me Can Take the Train (Ceux qui m'aiment prendront le train, 1998), Intimacy (2001), His Brother (Son Frère, 2003), Gabrielle (2005), and Persecution (2009), Chéreau often features intense portrayals of gay men and homosexual relationships.

Chéreau's films reveal a particular concern for the representation of human bodies, not as idealized objects of beauty, but as graphically mired in their imperfect physicality and sexuality. Writing in the film magazine Cahiers du Cinéma, Jean Michel Frodon has argued that the body has been central to Chéreau's cinema since L'Homme Blessé and that it is the site of intersection between love and death.

This concern for the body has also been read as a potentially subtext in films where homosexuality is not a main theme. For example, the focus on the bodily imagery of blood, death, and sexuality in Chéreau's rendering of the St. Bartholomew's Day Massacre in Queen Margot has been associated with the AIDS crisis.

Similarly, the graphic sex scenes in Intimacy challenge the alluring and enticing images of straight pornography as the bodies of actors Mark Rylance and Kerry Fox are lit in a semi-darkness that almost distorts them like the bodies in Lucien Freud's or Francis Bacon's paintings.

Chéreau has repeatedly said that being gay has affected him as an artist, though he has failed to specify exactly in what ways. He has also stressed that he never wanted to specialize in gay stories. Instead, he claims to be interested in the general theme of desire and how it affects people. The experience of desire, Chéreau insists, is strikingly similar for heterosexuals and homosexuals.