Born František Lederer to a Jewish family near Prague (then part of Austria-Hungary), Lederer was raised bilingually, speaking both Czech and German, and, accordingly, also used the German form of his name, Franz Lederer. His father, Josef, was a leather merchant, and as a young man, Frantisek worked as a delivery boy for a department store in Prague.
Lederer`s fell in love with acting when he was young, and was trained at the Academy of Music and Academy of Dramatic Art in Prague. After service in the First World War, he made his stage debut as an apprentice with the New German Theater, a walk-on in the play Burning Heart. He toured Moravia and central Europe, making a name for himself as a matinee idol in theaters in Czechoslovakia, Hungary, Austria and Germany. Notable among his performances was a turn as "Romeo" in Max Reinhardt`s staging of Romeo and Juliet.
In the late 1920s, Lederer was lured into films by the German actress Henny Porten and her producer husband. Because of his good looks, it took some time for the critics to take him seriously, but his association with directors such as G. W. Pabst, for whom he did Pandora`s Box with Louise Brooks and Atlantic(both 1929), helped him overcome that problem. He was also notable in The Wonderful Lies of Nina Petrovna in the same year. Lederer, who was billed as "Franz" at this time, easily made the transition from silent films to talkies, and was on his way to becoming one of Europe`s top male film stars.
In 1931, Lederer was in London to perform on stage in Volpone and the next year in Autumn Crocus, which he then performed on Broadway – using the name "Francis" – where it played for 210 performances in 1932 and 1933. He also performed the play in Los Angeles. His performances attracted attention and film offers from Hollywood. With the deteriorating political situation in Europe, Lederer decided to stay in the United States.
In Lederer`s first American movies were fairly light fare in which he played the leading man, in films such as Man of Two Worlds (1934), Romance in Manhattan (1934), opposite Ginger Rogers, The Gay Deception (1935), opposite Frances Dee, and One Rainy Afternoon (1936). It was Irving Thalberg`s plan to make Lederer "the biggest star in Hollywood" but the death of Thalberg ended that, and Lederer never really caught on as a star in the American mode, perhaps because his Continental air didn`t go over well in an increasingly xenophobic culture.
Although he continued to occasionally play leads – notably when he was a playboy in Billy Wilder`s Midnight with Claudette Colbert and John Barrymore in 1939 – in the late 1930s Lederer began to expand his film acting repertoire with offbeat character parts, even playing villains. Edward G. Robinson praised Lederer`s performance as a German American Bundist opposite him in Confessions of a Nazi Spy in 1939, and he earned plaudits for his portrayal of a Fascist in The Man I Married (1940) opposite Joan Bennett.He also played a vampire for The Return of Dracula in 1958.