Butler was born in San Francisco. His mother was an actress and his father was a theater stage manager. His first acting roles were playing extras in stage plays. He later appeared in two D.W. Griffith films, The Girl Who Stayed Home and The Greatest Thing in Life. He also appeared in the 1927 Academy-award winning film 7th Heaven.
The same year, Butler made his directorial debut with High School Hero, a comedy for Fox. During Butler's nine-year tenure at Fox, he directed over thirty films, including four Shirley Temple vehicles. Butler's last film for Fox, Kentucky, won Walter Brennan an Academy Award for Best Supporting Actor.
Butler worked with Bing Crosby in Road to Morocco and If I Had My Way. He directed many films starring Doris Day, among them It's a Great Feeling, Tea For Two, By the Light of the Silvery Moon, Lullaby of Broadway, April in Paris, and Calamity Jane.