Sillitoe was born at Tulse Hill, London, on May 22, 1888, the second son and second child of Joseph Henry Sillitoe, average adjuster, and his wife, Bertha Leontine Smith. There was also a younger sister. The family suffered from the financial wastefulness of Joseph Sillitoe. After leaving St Paul's choir school in 1902, Percy Sillitoe lived at home for three years during which he received some private tuition. From 1905–7 he worked for the Anglo-American Oil Company and in 1908 became a trooper in the British South Africa Police, a tough, highly disciplined paramilitary force, in what was then Southern Rhodesia. He transferred to the Northern Rhodesia police in 1911, was commissioned and, in 1913, became engaged to Dorothy Mary, daughter of John Watson, of Elloughton, Yorkshire, surveyor and Justice of the Peace; he had met her on board ship when returning to Africa from sick leave. He took part in the campaign in German East Africa, and afterwards served as a political officer in Tanganyika from 1916 to 1920, when he resigned from the Northern Rhodesia police, and returned home. In 1920 he married Dorothy, and they had a daughter and two sons.
A further two years as a colonial service district officer in Tanganyika followed, but his wife disliked the life, and after suffering a serious illness himself Sillitoe resigned in 1922. Prompted by his father-in-law he applied for the post of chief constable in Hull, but this application, and another to Nottingham, were unsuccessful. Sillitoe spent the winter of 1922–3 reading for the bar as a student of Gray's Inn, without finding much satisfaction in his studies and becoming increasingly depressed. However, in the spring of 1923 he applied successfully for appointment as Chief Constable of Chesterfield and began the career in which he was to achieve distinction.
At Chesterfield, where he stayed two years, Sillitoe made a considerable mark and, after a year as chief constable of the East Riding of Yorkshire, he was appointed chief constable of Sheffield on 1 May 1926. Here he commanded a substantial force badly in need of rejuvenation and strong leadership and faced serious problems of law and order, gangs having at this time virtually complete control of the poorer parts of the city. In the course of five successful years Sillitoe revitalized and modernized the force, broke the power of the gangs by the use of plain-clothes police patrols prepared to use ‘reasonable force’, and acquired a reputation as administrator, disciplinarian, and resolute upholder of the law.
This led to Sillitoe's appointment in 1931 as chief constable of Glasgow to command a force of 2500 men, second in size to the London Metropolitan Police, and to face problems similar to those which he had mastered in Sheffield. His tenure of the post, which lasted twelve years, further enhanced his reputation. In the words of one of his subordinates, himself a future chief constable of Glasgow, his arrival was ‘like a breath of fresh air’ from which the whole of the police service in Scotland ultimately benefited. He is credited with breaking the power of the notorious Glasgow razor gangs during the 1930s, made infamous in the novel No Mean City. During his time as Chief Constable of City of Glasgow Police, he was credited with the introduction of wireless radios allowing communication between headquarters and vehicles, which previously relied completely upon the use of Police boxes, use of civilians in police related roles, and the introduction of compulsory retirement after 30 years service.
He is further credited with the introduction of the Sillitoe Tartan which is more commonly recognized as the black and white diced pattern on police cap bands, originally based on that used by several Scottish regiments on the Glengarry.
He was appointed CBE in 1936 and knighted in 1942, and the following year was invited to take command of the new Kent joint force in which the county and nine city and borough forces were combined to facilitate planning and co-operation with the fighting services prior to the invasion of Europe. This was his last police appointment which he held until he became Director General of MI5 on May 1 1946, in succession to Sir David Petrie.
Sillitoe wrote in his autobiography that he wished he could persuade himself that his appointment as director-general fulfilled his life's ambition. He had been invited to apply for the post by the Home Office: it was not, he said, one to which the aspirations of a policeman would normally have turned. In fact he was unhappy in it. Sillitoe oversaw the service at a particularly difficult time when the KGB and GRU had a series of successes. His period of office coincided saw the trials of Alan Nunn May and Klaus Fuchs and the defections of Bruno Pontecorvo, Guy Burgess and Donald MacLean - and by the investigation afterwards, which showed that MI5 had been unaware and slow to act. Sillitoe, who had immense concern for his public reputation, had to answer for what with hindsight could sometimes be seen as blameworthy mistakes. The problem of communists in government service required flexibility and political judgement, which were not his strong suits. MI5 needed a different style of leadership from a police force. Moreover, Sillitoe had no liking for people whom he called ‘book-learned intellectuals’—a category to which (in his view) many MI5 officers could be consigned. For their part the senior staff of MI5, backed by considerable wartime achievements, had had their own favoured candidate for director-general and resented the choice of an outsider whose career had not tended to develop the particular skills which the post required. A rift developed at a high level which was never closed.
Sillitoe's most valuable contribution was made overseas in extending collaboration with, and promoting organization for security in, the old Commonwealth countries and in assisting colonial governments to establish machinery to cope with the security problems which accompanied the evolution of colonial rule into self-government. Here the resolution and forthrightness which had helped to make him a successful chief constable again served him well—although his predilection for publicity shocked traditionalists at home. Sillitoe was made KBE in 1950. Despite setbacks and public criticism he enjoyed Clement Attlee's confidence throughout the latter's premiership.
After retiring from MI5 in 1953 Sillitoe became head of the International Diamond Security Organization established by De Beers to curb the flow of diamonds bypassing what was called at the time the De Beers Central Selling Organization. The main leakage (from Sierra Leone via Liberia) was successfully plugged and the International Diamond Security Organization was wound up in 1957. Sillitoe later became chairman of Security Express Ltd. He died in Eastbourne on April 5 1962.