Norman Norell was born Norman David Levinson in Indiana in 1900. Norell's father owned a menswear store and introduced his son to vaudeville, inspiring Norell to become a costume designer. In later years, Norell also professed an early interest in fashion magazines.

In approximately 1919, Norell moved to New York City, where he took classes at the Pratt Institute in Brooklyn, and created a new surname by combining the first three letters of his first name with two letters from his last name, and adding an extra "l." By the early 1920s, Norell was fulfilling his childhood ambition, designing costumes for vaudeville shows and film productions in Paramount Pictures' New York studios.

In 1924, Norell made the transition from costume design to fashion design, working for dress manufacturer Charles Armour. From 1928 until approximately 1940, Norell designed for Hattie Carnegie and accompanied her on business trips to Paris. In 1941, he joined Anthony Traina and together the two designers formed "Traina-Norell."

The American fashion industry's ascendancy during World War II boosted Traina-Norell's reputation. The firm's ready-to-wear collections were recognized as being able to compete with Parisian couture. Norell was inventive with his use of non-rationed items, such as sequins, which would became associated with the designer through his close-fitted, sequined "mermaid dresses." In 1943, Norell was honored as the first recipient of the American Fashion Critics Award, the Coty, at the Metropolitan Museum of Art. He would receive a second Coty Award in 1951, and in 1956 was the first designer inducted into the American Fashion Critics Award's Hall of Fame.

From 1943 until his death, Norell regularly served as a visiting critic for Parsons School of Design's Fashion Design Department, working with a number of future designers, including Louis Dell'Olio. It was thought for many years that Norell had attended or graduated from Parsons. He received a distinguished alumni medal, the Parsons Jubilee Medal for Distinguished Achievement, and in 1962, Norell became a member of the school's Board of Trustees. Parsons has no record of his enrollment.

After Traina's death in 1960, Norell purchased the firm with the assistance of silent backers. That same year, a Norell design was chosen for the cover of the September 26th issue of LIFE magazine. Two years later he helped found the Council of Fashion Designers of America and served as its first president. Norell released his Norell fragrance in 1968. A financial success, the proceeds from the sales of the perfume helped him to buy out his partners.

In October 1972, Norell suffered a stroke while working on a retrospective of his work for the Metropolitan Museum of Art and died ten days later on October 25. Following Norell's death, Gustave Tassell (born 1926), who, like Norell, had designed for Hattie Carnegie, took over the firm, which closed in March 1977. Norell's fashions continued to be recognized throughout the 1980s and into the 2000s, receiving attention in museum exhibitions and worn by celebrities, including actress Demi Moore and First Lady Michelle Obama.