Gatlif was born in Algiers to a Kabyle father and a Romani mother.  After his childhood there, Gatlif arrived in France in 1960 following the Algerian War of Independence.

Gatlif struggled for years to break into the film industry, playing in several theatrical productions until directing his first film, La Tête en ruine, in 1975. He followed it with the 1979 La Terre au ventre, a story of the Algerian War of Independence.

Since the 1981 Corre, gitano, Gatlif's work has been focused on the Romani people of Europe, from whom he partially traces his descent.

After making Gaspard et Robinson in 1990, Gatlif spent 1992 and 1993 shooting Latcho Drom, which was awarded numerous prizes. This feature-length musical film, often mislabelled as a documentary, deals with gypsy culture throughout the world around the theme of their music and dance. For Vincent Ostria, then journalist at the Cahiers du Cinéma, it was "the most genuine film of the year (1993 editor's note)." A year later, Gatlif brought the world of the author J. M. G. Le Clézio (pen-name) to the screen in Mondo (1994).

His 2004 film Exils, won the Best Director Award at the 2004 Cannes Film Festival.  His film Transylvania also premiered at Cannes in May 2006.

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