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Daldry was planning to direct a film adaptation of Michael Chabon's Pulitzer Prize-winning novel The Amazing Adventures of Kavalier & Clay in 2005. In the ensuing three years, the project was cancelled and reinitiated several times, and in late 2006 was partially cast with Natalie Portman and Tobey Maguire. According to Chabon, production then stalled due to "studio-politics kinds of reasons that I'm not privy to," and as of April 2007 remains inactive.

In 2001, Daldry married American performance artist and magazine editor Lucy Sexton, with whom he has a daughter, Annabel Clare. Despite this, he continues to refer to himself as gay because the public “don’t like confusion.”

Daldry made his feature film directorial debut with Billy Elliot (2000). His next film was The Hours, and it won Best Actress at the Academy Awards for Nicole Kidman. Recently, he directed a stage musical adaptation of Billy Elliot, and in 2009 his work on it earned him a Tony Award for Best Director of a Musical. He has also made a film version of The Reader (2008), based on the book of the same name and starring Kate Winslet, David Kross and Ralph Fiennes. The film won Best Actress at the Academy Awards for Kate Winslet. He has received Academy Award nominations for directing three of his five films.

Daldry was in a relationship with set designer Ian MacNeil for 13 years. They met at an outdoor production of Alice in Wonderland in Lancaster in 1988, and after settling in Camberwell, began collaborating on theatrical productions.

Daldry began his career as an apprentice at the Sheffield Crucible from 1985 to 1988, working under artistic director Clare Venables. He also headed productions at the Manchester Library Theatre, Liverpool Playhouse, Stratford East, Oxford Stage, Brighton and the Edinburgh Fringe Festival. He was Artistic Director of the Royal Court Theatre from 1992–98, where he headed the £26 million development scheme. He was also Artistic Director of London's Gate Theatre (1989–92) and the Metro Theatre Company (1984–86). He is currently on the Board of the Young and Old Vic Theatres and remains an Associate Director of the Royal Court Theatre. He was the Cameron Mackintosh Visiting Professor of Contemporary Theatre for 2002 at St Catherine's College, Oxford.

Daldry's fourth film was Extremely Loud & Incredibly Close, an adaptation of the book of the same name written by Jonathan Safran Foer, starring Tom Hanks, Sandra Bullock, Max von Sydow and introduced newcomer Thomas Horn. The screenplay was written by Eric Roth. The film received a nomination for Best Picture at the 84th Academy Awards and a nomination for von Sydow for Best Supporting Actor.

After graduation, he spent a year travelling through Italy, where he became a clown's apprentice. He then trained as an actor on the postgraduate course at East 15 Acting School from 1982 to 1983.

Stephen David Daldry, CBE (born 2 May 1960) is an English director and producer of film, theatre, and television. He has won three Olivier Awards for his work in the West End and two Tony Awards for his work on Broadway. He has received three Academy Awards nominations for Best Director, for films Billy Elliot (2000), The Hours (2002), and The Reader (2008). From 2016 to 2019, he produced and directed the Netflix television series The Crown, for which he received two Primetime Emmy Award nominations and one win for Outstanding Directing for a Drama Series and Outstanding Drama Series. Daldry joined an elite group of directors by receiving nominations for direction in theatre, television and film.