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Jim Sheridan was born in Dublin, Ireland on 6 February 1949.[2] He is the brother of playwright Peter Sheridan. The family ran a lodging house, while Anna Sheridan worked at a hotel and Peter Sheridan Snr was a railway clerk with CIÉ. Sheridan's early education was at a Christian Brothers school. In 1969 he attended University College Dublin to study English and History. In 1972, he graduated with a Bachelor of Arts degree in English. He became involved in student theater there, where he met Neil Jordan, who also was later to become an important Irish film director. After graduating from UCD in 1972, Sheridan and his brother began writing and staging plays, and in the late 1970s began working with the Project Theatre Company.

In 1981, Sheridan emigrated to Canada, but eventually settled in the Hell's Kitchen section of New York City. He enrolled in NYU's Tisch School of the Arts and became the artistic director of the Irish Arts Center.

Sheridan returned to Ireland in the late 1980s. In 1989, he directed My Left Foot, which became a critical and commercial success and won Daniel Day-Lewis and Brenda Fricker Academy Awards. He followed that with The Field (with Richard Harris) in 1990; then with In the Name of the Father in 1993, a fictionalized re-telling of the case of the Guildford Four. The film won the Golden Bear at the 44th Berlin International Film Festival.

In 1996 he co-wrote Some Mother's Son with Terry George. The Boxer (with Daniel Day-Lewis) was nominated for a Golden Globe for best film drama in 1997. The film was Sheridan's third collaboration with Day-Lewis after My Left Foot and In the Name of the Father, making him the only director to work with Day-Lewis on three films. In 2003, he released the semi-autobiographical In America, which tells the story of a family of Irish immigrants trying to succeed in New York. The film received positive reviews and earned Samantha Morton and Djimon Hounsou Academy Award nominations. In 2005 he released Get Rich or Die Tryin', a film starring rap star 50 Cent.

Sheridan helmed the 2009 film Brothers, starring Tobey Maguire and Jake Gyllenhaal, which was shot in New Mexico. He also directed the thriller Dream House, which starred Daniel Craig, Naomi Watts, and Rachel Weisz.