Born in Hedington, Oxfordshire he was educated at Lincoln College in Oxford. At the outbreak of World War I he joined an artillery company. In 1915 he transferred to the Royal Flying Corps and became a fighter pilot, ending the war as leader of 84 Squadron with a M.C and a D.F.C.
Post-war he worked briefly for Handley Page and as a commercial pilot before rejoining the Royal Air Force in 1920. He became an RAF instructor before being appointed to the Air Ministry in 1936. He was raised to Air Vice Marshal in 1938 and made assistant chief of air staff.
During World War II he and Trafford Leigh-Mallory clashed with the head of 11 Group Keith Park and the head of Fighter Command, Hugh Dowding, over strategy in the Battle of Britain. Douglas argued for a more aggressive engagement with a 'Big Wing' strategy. When Charles Portal was made chief of the air staff in October 1940 he supported Douglas, moving Park and Dowding and appointing Douglas to replace Dowding as head of fighter Command.
In 1942 Douglas was replaced at Fighter Command by Leigh-Mallory and he was transferred to Egypt, becoming commander of the RAF in the Middle East in 1943. Douglas returned to England in 1944 to head Coastal Command during the invasion of Normandy.
Douglas was well rewarded after the war, he was the first commander of the British Occupation Zone in Germany and he was made 1st Baron Douglas of Kirtleside in 1946 and promoted to Air Marshal of the RAF. He retired in 1948 and became chairman of BEA in 1949 a post he retained until 1964.