Born to a Jewish family of Morduch (Max) Halsman, a dentist, and Ita Grintuch, a grammar school principal, in Riga, Halsman studied electrical engineering in Dresden.

In September 1928, Halsman went on a hiking tour in the Austrian Alps with his father, Morduch. During this tour, Morduch died from severe head injuries. The circumstances were never completely clarified and Halsman was sentenced to 4 years imprisonment for patricide. The case provoked anti-Jewish propaganda and thus gained international publicity, and Albert Einstein and Thomas Mann wrote in support of Halsman. Halsman was finally released in 1931, under the condition that he leave Austria for good, never to return. Halsman consequently left Austria for France. He began contributing to fashion magazines such as Vogue and soon gained a reputation as one of the best portrait photographers in France, renowned for his sharp, dark images that shunned the old soft focus look. When France was invaded, Halsman fled to Marseille and he eventually managed to obtain a U.S. visa, aided by family friend Albert Einstein (whom he later famously photographed in 1947).

Halsman had his first success in America when the cosmetics firm Elizabeth Arden used his image of model Constance Ford against the American flag in an advertising campaign for "Victory Red" lipstick. A year later in 1942 he found work with Life magazine, photographing hat designs, one of which, a portrait of a model in a Lilly Daché hat, was his first of the many covers he would do for Life.

In 1941 Halsman met the surrealist artist Salvador Dalí and they began to collaborate in the late 1940s. The 1948 work Dali Atomicus explores the idea of suspension, depicting three cats flying, a bucket of thrown water, and Salvador Dalí in mid air. The title of the photograph is a reference to Dalí's work Leda Atomica which can be seen in the right of the photograph behind the two cats. Halsman reported that it took 28 attempts to be satisfied with the result. Halsman and Dali eventually released a compendium of their collaborations in the 1954 book Dali's Mustache, which features 36 different views of the artist's distinctive mustache. Another famous collaboration between the two was In Voluptas Mors, a surrealistic portrait of Dali beside a large skull, in fact a tableau vivant composed of seven nudes. Halsman took three hours to arrange the models according to a sketch by Dali. A version of In Voluptas Mors was used subtly in the poster for the film The Silence of The Lambs, and less subtly for the film The Descent.

In 1947, he made what was to become one of his most famous photos of a mournful Albert Einstein, who during the photography session recounted his regrets about his role in the United States pursuing the atomic bomb. The photo would later be used in 1966 on a U.S. postage stamp and in 1999, on the cover of Time Magazine, when Time dubbed Einstein as "Person of the Century."

In 1951 Halsman was commissioned by NBC to photograph various popular comedians of the time including Milton Berle, Sid Caesar, Groucho Marx, and Bob Hope. While photographing the comedians doing their acts, he captured many of the comedians in mid air, which went on to inspire many later jump pictures of celebrities including the Ford family, The Duke and Duchess of Windsor, Marilyn Monroe and Richard Nixon. Halsman commented, "When you ask a person to jump, his attention is mostly directed toward the act of jumping and the mask falls so that the real person appears." The photographer developed a philosophy of jump photography, which he called jumpology. He published Philippe Halsman's Jump Book in 1959, which contained a tongue-in-cheek discussion of jumpology and 178 photographs of celebrity jumpers.

His 1961 book Halsman on the Creation of Photographic Ideas, discussed ways for photographers to produce unusual pieces of work, by following three rules: "the rule of the unusual technique", "the rule of the added unusual feature" and "the rule of the missing feature".

Other celebrities photographed by Halsman include Alfred Hitchcock, Judy Garland, Winston Churchill, Marilyn Monroe, Dorothy Dandridge, and Pablo Picasso. Many of those photographs appeared on the cover of Life.

In 1952, John F. Kennedy had two photograph sittings by Halsman. The result was that one photograph from the first sitting appeared on the jacket of the original edition of Profiles in Courage. In the second sitting a photograph was used in the senatorial campaign.

In 1958 Halsman was listed in Popular Photography's "World's Ten Greatest Photographers", and in 1975 he received the Life Achievement in Photography Award from the American Society of Magazine Photographers. He also held numerous large exhibitions worldwide.