One of three Frohman brothers, he was born in Sandusky, Ohio. He was the youngest, his older brothers being: Daniel Frohman (1851–1940) and Gustave Frohman (1854–1930). The year of his birth date is generally erroneously reported as 1860, and his birthday is shown as July 16 on his tombstone, but the correct date is July 15, 1856 (sources: Certified Birth Certificate, Sandusky, Ohio and the 1860 Federal Census for Sandusky, Ohio, which shows: "Charley," age 4).
Frohman's first success as a producer was with Bronson Howard's Shenandoah (1889). Frohman founded the Empire Theatre Stock Company to acquire the Empire Theatre in 1892, and the following year produced his first Broadway play Clyde Fitch's Masked Ball. This play marked the first time that actress Maude Adams played opposite John Drew, which led to many future successes. Soon he acquired five other New York City theaters.
Frohman was known for his ability to develop talent. His stars included William Gillette, John Drew Jr., Ethel Barrymore, E. H. Sothern, Julia Marlowe, Maude Adams, and Henry Miller. In 1896, Frohman, Al Hayman, Abe Erlanger, Mark Klaw, Samuel F. Nixon, and Fred Zimmerman formed the Theatrical Syndicate. Their organization established systemized booking networks throughout the United States and created a monopoly that controlled every aspect of contracts and bookings until the late 1910s when the Shubert brothers broke their stranglehold on the industry.
In 1897, Frohman leased the Duke of York's Theatre in London, introducing plays there as well as in the United States. Clyde Fitch, J. M. Barrie, and Edmond Rostand were among the playwrights he promoted. As a producer, among Frohman's most famous successes was Barrie's Peter Pan, or The Boy Who Wouldn't Grow Up which he debuted at the Duke of York's in December 1904, and later produced in the United States starring Maude Adams. In the early years of the 20th century, Frohman also established a successful partnership with Seymour Hicks to produce musicals and other comedies in London, including Quality Street in 1902, The Admirable Crichton in 1903, The Catch of the Season in 1904, The Beauty of Bath in 1906, The Gay Gordons in 1907, and A Waltz Dream in 1908, among others. He also partnered with other London theatre managers. The system of exchange of successful plays between London and New York was largely a result of his efforts. In 1910, Frohman attempted a repertory scheme of producing plays at the Duke of York's. He advertised a bill of plays by J. M. Barrie, John Galsworthy, Harley Granville Barker, and others. The venture began tentatively, and while it may have proved successful, Frohman canceled the scheme when London theatres closed at the death of King Edward VII in February 1910.
By 1915 Frohman had produced more than 700 shows, employed an average of 700 actors per season, and paid salaries totalling $25,000 a week. Frohman controlled five theaters in London, six in New York City, and over two hundred throughout the rest of the United States.
Frohman died in the 1915 sinking of the RMS Lusitania by the German submarine, Unterseeboot 20. Songwriter Jerome Kern was meant to accompany him on the voyage, but overslept after being kept up late playing requests at a party. Frohman was reported by survivors to have declined a seat on a lifeboat, saying "Why fear death? It is the greatest adventure in life," echoing the famous line from Peter Pan, "To die would be an awfully big adventure". Frohman's body was recovered and brought back to the United States for burial in the Union Field Cemetery in Ridgewood, Queens,Queens, New York.