After graduation, Dancy moved to London, where a chance conversation in a cafe led to his meeting casting director Ros Hubbard and agent Dallas Smith, who signed him. In 1999, Dancy played the role of Danny, who had a fleeting romance with Rachel, one of the show’s main characters, in the second series of Cold Feet. In 2002, Dancy played Daniel Deronda in the BBC’s adaptation of George Eliot’s novel Daniel Deronda.

Notable roles from film include Dancy’s Prince Charmont from the 2004 Disney film Ella Enchanted alongside Anne Hathaway and, from the same year, Galahad in King Arthur alongside later Hannibal co-star Mads Mikkelsen. In 2005, he starred as Adam Raki in Adam, an independent film which premiered at the Sundance Film Festival in 2009 and follows the story of a young man with an autism spectrum disorder. He went on to appear in various other films.

In theatre, Dancy has appeared in MCC Theater’s The Pride, written by Alexi Kaye Campbell, at the Lucille Lortel Theatre in New York City. The off-Broadway production was directed by Joe Mantello and co-starred Ben Whishaw and Andrea Riseborough. In 2007, Dancy had a starring role on Broadway as Captain Dennis Stanhope in Journey’s End (Belasco Theatre). From 2010 until 2011, he starred in Manhattan Theatre Club’s Broadway production of Venus in Fur alongside Nina Arianda. His performance was praised by The New York Times theatre critic Charles Isherwood. In August 2018, it was announced he would appear with Stockard Channing in Roundabout Theatre Company’s off-Broadway premiere of Apologia, written by Alexi Kay Campbell, in the dual roles of Peter and Simon.

Dancy met American actress Claire Danes on the set of Evening in Newport, Rhode Island, and they began dating. In February 2009, they announced their engagement. The couple married in France in 2009 in a secret ceremony. They have two children together, Cyrus Michael Christopher Dancy, born on December 17, 2012, and a second son, Rowan, born on August 27, 2018.

In March 2012, NBC announced that Dancy had been cast as Will Graham in Hannibal, the television adaptation based on the main character of Thomas Harris’ 1981 novel Red Dragon. The show received critical acclaim and was nominated for numerous awards. It was cancelled after three seasons and concluded in 2015, though there are hopes for its revival. From 2016 to 2018, he appeared for three seasons as Cal Roberts, a lead character in Hulu’s The Path, alongside Aaron Paul and Michelle Monaghan.