Milland was born Reginald Truscott-Jones in Neath, Wales, and took his stage surname from an area (the "mill lands") of the town. He had three sisters. Before becoming an actor, he served in the Household Cavalry. An expert shot, he became a member of his company's rifle team, winning many prestigious competitions, including the Risley Match in England. When his four-year duty service was completed, Milland tried his hand at acting. He was discovered by a Hollywood talent scout whilst performing on the stage in London, went to America, and was signed with Paramount Pictures.
When WWII began, Milland tried to enlist in the US Army Air Forces, but was rejected because of an impaired left hand. He worked as a civilian flight instructor for the Army, and toured with a United Service Organisations' (USO) troupe in the South Pacific in 1944. He married Malvinia Warner on September 30, 1932, and they remained together until his death. They had a son, Daniel, and an adopted daughter, Victoria.
When working on I Wanted Wings (1941), with Brian Donlevy and William Holden, he went up with a pilot to test a plane for filming. While up in the air, Ray decided to do a parachute jump (being an avid amateur parachutist) but, just before he could disembark, the plane began to sputter, and the pilot told Milland not to jump as they were running low on gas and needed to land. Once on the ground and in the hangar, Ray began to tell his story of how he'd wanted to do a jump. As he did so, the color ran out of the costume man's face. When asked why, he told Ray that the parachute he'd worn up in the plane was "just a prop", and that there had been no parachute. During the filming of Reap the Wild Wind (1942), Milland's character was to have curly hair. Milland's hair was naturally straight, so the studio used hot curling irons on his hair to achieve the effect. Milland felt that it was this procedure that caused him to go prematurely bald, forcing him to go from leading man to supporting player earlier than he would have wished.
The pinnacle of Milland's career and acknowledgement of his serious dramatic abilities came in 1946 when he won an Academy Award for Best Actor for his portrayal of an alcoholic in Billy Wilder's film The Lost Weekend (1945). In 1951 he gave a heart-breaking performance in Close to my Heart starring opposite Gene Tierney as a couple trying to adopt a child; the film was ahead of its time in dealing with the "nature vs. nurture" debate, it opened a conversation about the adoption process. However, Milland failed to match his success in later years. He concentrated on directing for TV and film in the 1960s, in which he achieved some success. He returned as a movie character actor in the late 60s and the 70s, notably in the cult classic Daughter of The Mind (1969), in which he was reunited with Gene Tierney, and in Love Story (1970). He also made many television appearances.
Milland gave the shortest acceptance speech of any Oscar winner: he simply bowed and left the stage.
Milland had a tattoo on his upper right arm of a skull with a snake curled up on top of it with the tail of the snake sticking out through one of the eyes. The tattoo can be seen for a brief moment in the movie Her Jungle Love (1938).
Milland had a near-fatal accident on the set of Hotel Imperial (1939). One scene called for him to lead a cavalry charge through a small village. An accomplished horseman, Milland insisted upon doing this scene himself. As he was making a scripted jump on the horse, his saddle came loose, sending him flying straight into a pile of broken masonry. Laid up in the hospital for weeks with multiple fractures and lacerations, he was lucky to be alive.
Milland died of lung cancer in Torrance, California in 1986, aged 79. He was survived by his wife and children in Torrance.