Margalit was born in 1906 in Ostrołęka, in the Łomża Governorate of Congress Poland, then part of in the Russian Empire, and began acting in his home town at the age of 13.

For two and half years he was a pioneer in the Jerusalem section of Gdud HaAvoda and worked in a quarry.

In 1925, he was chosen and accepted to the drama school of the Ohel Theater under the guidance of Moshe Halevi and in 1929 he joined the acting cast of the theatre.

At the end of the Second World War, Margalit made a tour to play before Jewish volunteers from Palestine serving in the British Army in Europe and the Middle East, as well as Holocaust survivors in Italy and illegal immigrants and deportees held by the British in detention camps in Cyprus.

Another acclaimed role played by Margalit was in the successful comedy "Ha'ketubah" by Ephraim Kishon, performed in Ha'ohel in 1961.