Born in Egypt, Proyas relocated to Australia with his family when he was three years old. He began making films at age ten and went on to attend the Australian Film Television and Radio School along with Jane Campion and Jocelyn Morehouse. Proyas collaborated with Campion on two of her shorts, "A Girl's Own Story" (1984), for which he wrote and performed a song, and "Passionless Moments" (also 1984), which he photographed. Proyas' own short, "Groping" (1982), had earned him some attention at festival screenings in Sydney and London. Also while still a student, the enterprising novice formed Meaningful Eye Contact, a production company.

"Spirits of the Air, Gremlins of the Clouds" (1989) marked Proyas' feature debut as director and screenwriter. Set in a post-apocalyptic world, the film, with its stylized production design and aural texture, was atypical of standard Australian fare, more closely resembling a longform music video. Critics admired the director's vision, but felt the overall result was lacking. Proyas continued to hone his craft helming TV advertisements for products like Nike, Nissan and Swatch (earning kudos from advertising associations in both Australia and England) and directing videos for such artists as Sting, INXS and Crowded House.

In 1993, Proyas was tapped to helm the screen adaptation of James O'Barr's comic strip "The Crow" (1994). While filming, lead actor Brandon Lee died of an accidental gunshot wound (ironically the film's story revolves around his character's resurrection). His death cast a pall over the remainder of the filming and its subsequent theatrical release, although reviews were generally favorably, most singling out the production values which created a colorless rain-soaked wasteland that invoked comparisons with Ridley Scott's seminal "Blade Runner" (1982) and Tim Burton's "Batman" (1989). Made for about $14 million, it grossed close to $50 million domestically.

Proyas seemed set to move on to other projects and was announced as the director of "Casper" (1995), but left the project and was replaced by Brad Silberling. After a four year absence, he returned with another thriller, "Dark City" (1998), about an amnesiac who may or may not have been a serial killer.