After education at the church school of St Peter's, Morley, Ainley became a bank clerk in Sheffield, where he took part in amateur dramatics.

[1] When the actor-manager George Alexander was on tour in 1899 in H. A. Jones's play The Masqueraders, Ainley obtained his permission to "walk on" (i.e. appear as a non-speaking extra).

He played Malvolio (1912) and Leontes under the direction of Granville-Barker and portrayed Hamlet several times, including a 1930 production that was chosen for a Royal Command Performance.

[11] He was married three times – to Susanne Sheldon, Elaine Fearon and the novelist Bettina Riddle, who was known as the Baroness von Hutten zum Stolzenberg.

Fifteen letters in the possession of Laurence Olivier's widow Joan Plowright suggest that Ainley may have had a sexual relationship with the younger actor in the late 1930s.