He became a star in Broadway theatre by 1918, and made his screen debut in 1919. He acted on the stage in Australia but was most famous for his U.S. horror film roles in the 1930s. His two most memorable parts were as the crazed, disfigured sculptor in Mystery of the Wax Museum (1933), and as Inspector Krogh in Son of Frankenstein (1939), memorably sent up by Kenneth Mars in Mel Brooks's Young Frankenstein (1974).
When he was not cast in macabre roles, Atwill often appeared in the 1930s as righteous-minded authority figures. For example, in 1937's less memorable The Wrong Road for RKO, investigator Atwill persuades a young, bank-robbing ingenue played by Helen Mack and her boyfriend Richard Cromwell to return their ill-gotten $100,000 and give up a life of crime. Two of Atwill's other notable non-horror roles were opposite his contemporary Basil Rathbone in films featuring Arthur Conan Doyle's character Sherlock Holmes, including a role as Dr. James Mortimer in 20th Century Fox's 1939 film rendition of the Conan Doyle novel The Hound of the Baskervilles, and the 1943 Universal Studios film Sherlock Holmes and the Secret Weapon, in which he played Holmes' archenemy and super-villain, Professor Moriarty.
He remained a stalwart of the Universal horror films until his career flagged in the 1940s because of a widely publicized sex scandal.