Jones was born in Buffalo, New York, the son of Ruth (née Schooley), an art historian who urged Jones towards a career in acting, and Douglas Bennett Jones, who died during Jones's childhood. Jones went to London in 1969 to study at the London Academy of Music and Dramatic Art, following that up with a three-year stint with the Stratford Theatre in Stratford, Ontario.
Jones began acting in small parts in film and TV in the late ’70s. A supporting role in the 1983 Rodney Dangerfield film Easy Money, and a guest shot on Remington Steele led to his replacing Ian Richardson in Miloš Forman’s 1984 adaptation of the Peter Shaffer play Amadeus as Emperor Joseph II; he received a nomination for a Golden Globe Award for Best Supporting Actor - Motion Picture for his performance. Jones’ performance as Mr. Edward R. Rooney, Dean of Students in Ferris Bueller’s Day Off made him a cultural icon. Rooney, self-important and obsessed with catching the chronically truant Ferris Bueller, became a symbol of stuffed-shirt pomposity and authoritarian hatefulness. Jones has proven to be a favorite of director Tim Burton’s, starring in Beetlejuice, Ed Wood as The Amazing Criswell, and Sleepy Hollow, and has also appeared in such prominent films as The Hanoi Hilton, The Hunt for Red October, Howard the Duck, Houseguest, The Devil’s Advocate, and Stuart Little. Jones also had a key role in The Pest, a comedy starring John Leguizamo, as the evil German trying to hunt Pestario "Pest" Vargas. Other key roles for Jones include Stay Tuned, where he played Mr. Spike, and the 1992 comedy Mom and Dad Save the World, where he played Dick Nelson. Jones was costarred in the 1999 cult favorite cannibal western Ravenous, and was Inspector Lestrade in Without A Clue.
Jones has guested on a number of television shows, including Amazing Stories, Tales from the Crypt, and Wayside. In 1989, Jones starred in Wes Craven’s short-lived CBS sitcom The People Next Door, where he played a cartoonist whose imagination could make things come to life. He also appeared as famous newspaper publisher A. W. Merrick on HBO’s highly acclaimed show Deadwood. His latest film, Who's Your Caddy?, debuted in 2007.
In 2002, Jones was arrested for possession of child pornography and employing a 14-year-old boy to pose for pornographic photographs. In a plea bargain, the possession of child pornography charge was dropped, and Jones pleaded no contest to inducing a minor to pose for sexually explicit photographs. He was sentenced to five years probation, and was ordered to undergo counseling and register as a sex offender. In July 2004, he was arrested by Florida police after failing to notify them of his change of residence as required under Florida's version of Megan’s Law. After the minor became an adult, he sued Jones in civil court in 2004. Jones was charged on June 30, 2010, in Los Angeles, with failing to update his sex offender registration status, as required under California's version of Megan's Law; failure to do so is a felony and he faces up to 3 years in prison.
Jones is the father of actor and film producer Julian Coutts.