He attended Upper Canada College in Toronto from 1926 to 1932 and while there attended services at the Church of St. Mary Magdalene . He would later leave the Presbyterian Church and convert to Anglicanism over objections to Calvinist theology.
After Upper Canada College, he studied at Queen's University in Kingston, Ontario from 1932 until 1935. At Queen's he was enrolled as a special student not working towards a degree, and wrote for the student paper, The Queen's Journal. He left Canada to study at Balliol College, Oxford, where he received a BLitt degree in 1938. The next year he published his thesis, Shakespeare's Boy Actors, and embarked on an acting career outside London. In 1940 he played small roles and did literary work for the director at the Old Vic Repertory Company in London. Also that year Davies married Australian Brenda Mathews, whom he had met at Oxford, and who was then working as stage manager for the theatre.
Davies' early life provided him with themes and material to which he would often return in his later work, including the theme of Canadians returning to England to finish their education, and the theatre.
Davies, along with family members William Rupert Davies and Arthur Davies, purchased several media outlets. Along with the Examiner newspaper, they owned the Kingston Whig-Standard newspaper, CHEX-AM, CKWS-AM, CHEX-TV, and CKWS-TV.
During his tenure as editor of the Examiner, which lasted from 1942 to 1955, and when he was publisher from 1955 to 1965, Davies published a total 18 books, produced several of his own plays and wrote articles for various journals.
For example, Davies set out his theory of acting in his Shakespeare for Young Players (1947) and then put theory into practice when he wrote Eros at Breakfast, a one-act play which was named best Canadian play of the year by the 1948 Dominion Drama Festival.
Eros at Breakfast was followed in close succession by Fortune, My Foe in 1949 and At My Heart's Core, a three-act play, in 1950. Meanwhile, Davies was writing humorous essays in the Examiner under the pseudonym Samuel Marchbanks. Some of these were collected and published in The Diary of Samuel Marchbanks (1947), The Table Talk of Samuel Marchbanks (1949), and later in Samuel Marchbanks' Almanack (1967). (An omnibus edition of the three Marchbanks books, with new notes by the author, was published under the title The Papers of Samuel Marchbanks in 1985.)
Also during the 1950s, Davies played a major role in launching the Stratford Shakespearean Festival of Canada. He served on the Festival's board of governors and collaborated with the Festival's director, Sir Tyrone Guthrie, in publishing three books about the Festival's early years.
Although his first love was drama and he had achieved some success with his occasional humorous essays, Davies found greater success in fiction. His first three novels, which later became known as The Salterton Trilogy, were Tempest-Tost (1951), Leaven of Malice (1954) (which won the Stephen Leacock Award for Humour), and A Mixture of Frailties (1958). These novels explored the difficulty of sustaining a cultural life in Canada, and life on a small-town newspaper, subjects of which Davies had first-hand knowledge.
In 1963 he became the Master of Massey College, the University of Toronto's new graduate college. During his stint as Master, he initiated the tradition of writing and telling ghost stories at the yearly Christmas celebrations. His stories were later collected in his book High Spirits (1982).
Davies built on the success of Fifth Business with two more novels: The Manticore (1972), a novel cast largely in the form of a Jungian analysis (for which he received that year's Governor-General's Literary Award), and World of Wonders (1975). Together these three books came to be known as The Deptford Trilogy.
During his retirement he continued to write novels which further established him as a major figure in the literary world: The Lyre of Orpheus (1988), Murther and Walking Spirits (1991) and The Cunning Man (1994). A third novel in what would have been a further trilogy was in progress at Davies' death. He also realized a long-held dream when he penned the libretto to an opera: The Golden Ass, based on The Metamorphoses of Lucius Apuleius, just like that written by one of the characters in Davies' 1958 A Mixture of Frailties. The opera was performed by the Canadian Opera Company at the Hummingbird Centre in Toronto, in April, 1999, several years after Davies' death.
Davies was a fine public speaker: deft, often humorous, and unafraid to be unfashionable. Often asked if he used a computer, Davies said in 1987: "I don't want a word-processor. I process my own words. Helpful people assure me that a word-processor would save me a great deal of time. But I don't want to save time. I want to write the best book I can, and I have whatever time it takes to make that attempt."