In 1941, Greenstreet began working for Warner Bros. His debut film role was also his most famous: Kasper Gutman ("The Fat Man") in The Maltese Falcon, which co-starred Peter Lorre as the twitchy Joel Cairo, a pairing that would prove profitable and long-lasting for Warner Bros. The duo appeared in nine films together, including Casablanca as crooked club owner Signor Ferrari (for which he received a salary of $3750 per week for seven weeks), as well as Background to Danger (1943, with George Raft), Passage to Marseille (1944, reteaming him with Casablanca stars Humphrey Bogart and Claude Rains), The Mask of Dimitrios (1944, receiving top billing), The Conspirators (1944, with Hedy Lamarr and Paul Henreid), Hollywood Canteen (1944), Three Strangers (1946, receiving top billing), and The Verdict (1946, with top billing). After a mere eight years, in 1949, Greenstreet's film career ended with Malaya, in which he was billed third, after Spencer Tracy and James Stewart. In those eight years, he worked with stars ranging from Clark Gable to Ava Gardner to Joan Crawford. Author Tennessee Williams wrote his one-act play The Last of My Solid Gold Watches with Greenstreet in mind, and dedicated it to him.
Greenstreet suffered from diabetes and Bright's disease, a kidney disorder. Five years after leaving films, Greenstreet died in 1954 due to complications from diabetes. He is interred at Forest Lawn Memorial Park Cemetery, in Glendale, California in the Utility Columbarium area of the Great Mausoleum, inaccessible to the public. He was survived by his only child, John Ogden Greenstreet, born out of Sydney's marriage to Dorothy Marie Ogden. John Ogden Greenstreet died March 4, 2004 at age 74.
Sydney is the great-uncle of actor Mark Greenstreet.
As a tribute to Greenstreet, the crime boss Hector Lemans in the computer game Grim Fandango was based on him. Jim Ward voiced the character, and even copied Greenstreet's unmistakable evil laugh. An episode of Star Trek, The Next Generation called "The Big Goodbye" has holographic villain called Cyrus Redblock, played by Lawrence Tierney, an apparent play on Greenstreet's character Kasper Gutman (The Fat Man) in The Maltese Falcon