Nowrasteh was born on 19 September 1956, in Boulder, Colorado, and grew up in Madison, Wisconsin. He is of Iranian descent, and his parents are Persian Baháʼísts. He graduated from Madison West High School in 1974 and was a city boys high school tennis champion. Nowrasteh attended New Mexico State University on an athletic scholarship and later transferred to the University of Southern California to attend the School of Cinematic Arts, graduating in 1977.

In 1986, Nowrasteh began his career by writing for the CBS television series The Equalizer. He went on to work on Falcon Crest as a producer and story editor, and wrote the pilot for the USA Network show La Femme Nikita (1996). He made his directorial debut with the Veiled Threat, a 1989 independent film based on the real-life murder of an Iranian journalist living in Orange County. The film was pulled from the AFI Film Festival after organizers received bomb threats, allegedly due to the film’s criticism of anti-Khomeni themes. Nowrasteh subsequently accused the AFI of buckling to “censorship” and claimed their pulling the film “killed” its chances at distribution.

Critics, including 9/11 Commission member Richard Ben-Veniste pointed out that some scenes in the film were complete fabrications. Richard Miniter, a conservative author and critic of the Clinton administration, said that a key scene with Sandy Berger was based on “Internet myth”: “If people wanted to be critical of the Clinton years there’s things they could have said, but the idea that someone had bin Laden in his sights in 1998 or any other time and Sandy Berger refused to pull the trigger, there’s zero factual basis for that.” Nowrasteh wrote about his work on Path To 9/11 in an opinion piece in the opinionjournal.com on 18 September 2006. He stated:

In 2001, Nowrasteh wrote and directed the highly rated, award-winning Showtime presentation The Day Reagan Was Shot, which starred Richard Dreyfuss as Alexander Haig and was executive produced by Oliver Stone. The following year he wrote 10,000 Black Men Named George, the story of the Pullman strike of the 1930s, for Showtime.

The 2006 ABC miniseries The Path to 9/11 aired under much controversy. Critics said it fictionalized the lead-up to the 11 September 2001 attacks in order to direct blame to the Clinton administration. Although Nowrasteh’s screenplay for The Path to 9/11 was billed by the ABC network as having been “based on the 9/11 Commission Report”, there were accusations that the screenplay evidenced political bias because of its allegedly contrafactual portrayal of events.

In August 2008, talk show host and documentary filmmaker John Ziegler and producer David Bossie of Citizens United premiered a documentary co-produced, written and directed by Ziegler entitled Blocking The Path to 9/11, which revisits the political controversy behind the ABC miniseries. Through interviews with the Path to 9/11 filmmakers (including Nowrasteh) and others, news clips regarding the controversy, and footage from the miniseries itself, the documentary asserts not only that accusations of the filmmakers’ covert political agenda were unfounded, but that they were generated by Clinton-era politicians concerned that the miniseries tarnished their political legacy, and were reported uncritically by bloggers and a biased news media. The documentary also claims that Disney/ABC ultimately shelved plans to release a DVD of the miniseries as a result of pressure from the political left, specifically the Clintons themselves. As noted in the documentary, Disney/ABC denies this and claims the decision not to release a DVD was purely a business decision.

Nowrasteh wrote and produced the controversial ABC miniseries The Path to 9/11. He then went on to co-write (with his wife, Betsy Giffen Nowrasteh), and direct the film The Stoning of Soraya M., released in 2009 by Lionsgate Films.

In 2010, the film was hailed as one of Movieguide’s Ten Best 2009 Movies for Mature Audiences and was the co-winner, with Invictus, of Movieguide’s Faith and Freedom Award for Promoting Positive American Values for 2009. It also shared, with “Women in Shroud,” the Cinema for Peace Award for Justice in conjunction with the Berlin Film Festival and won Outstanding Foreign Motion Picture at the NAACP Image Awards.

On 10 December 2015, Nowrasteh was interviewed on EWTN by Raymond Arroyo. Nowrasteh said of the film: “This is really a movie about a family and we take you inside the Holy Family.”

Nowrasteh directed the biblical drama The Young Messiah, which was released on 11 March 2016. The story was adapted by Cyrus and Betsy Giffen Nowrasteh from Anne Rice’s Christ the Lord, and was produced by 1492 Pictures and Ocean Blue Entertainment in association with CJ E&M Film Division. The film was distributed by Focus Features. The project had a jump start in early 2013 but was shut down in preproduction and was seemingly dead. Then in late 2014, the project was resurrected thanks to the efforts of Tracy K. Price and Bill Andrew, along with Italian producer Enzo Sisti. Filmed in Matera and Rome, Italy, the plot follows Jesus Christ at age seven, when he returns to Nazareth and learns about his true place as the son of God.