Raised in Liverpool and later in London, Isaacs fell accidentally into acting during his first year at university, going on to study at the Central School of Speech and Drama in London. Initially known as a TV actor in the UK, his biggest international film break was being selected to portray the villain, Colonel William Tavington, opposite Mel Gibson in the 2000 Revolutionary War epic The Patriot. Other notable roles include Lucius Malfoy, the influential henchman of Lord Voldemort, in the Harry Potter series of films; Captain Hook and Mr. Darling in P.J. Hogan's adaptation of Peter Pan; and Michael Caffee in the TV series Brotherhood. Isaacs played the leading role of Sir Mark Brydon, the British Ambassador to the USA, in the 2006 UK mini-series The State Within, for which he was nominated for the award of Best Performance by an Actor in a Mini-Series or a Motion Picture Made for Television in the 65th Golden Globe Awards.
Isaacs has performed on the stage in the UK on numerous occasions. He appeared in the Royal National Theatre's 1993 staging of Tony Kushner's Pulitzer Prize-winning play Angels In America as Louis Ironson, and more recently in Harold Pinter's play The Dumb Waiter in 2007 as Ben.
He has two daughters with documentary filmmaker Emma Hewitt.