Forster was born on 30 November 1969 in Au (today Illertissen), in the Neu-Ulm district of Bavaria, Germany. His parents, a German doctor and a Swiss architect moved to Switzerland when Forster was 9 years old. He spent his adolescence in Davos, a winter resort in eastern Switzerland, and as well as at the international boarding school Institut Montana Zugerberg in central Switzerland.
In 1990, when he was 20 years old, Forster moved to New York, in the United States. For the next three years, he attended New York University's film school, making several documentary films. In 1995, he moved to Hollywood and shot an experimental low-budget film for $10,000 called Loungers, which won the Audience Award at the Slamdance Film Festival. Forster's first feature-length motion picture was the psychological drama Everything Put Together (2000), which was nominated for the Grand Jury Prize at the Sundance Film Festival.
His breakthrough film was Monster's Ball (2001), in which he directed Halle Berry in her Academy Award-winning performance as the wife of a man on death row. The film also starred Billy Bob Thornton, Heath Ledger, Peter Boyle, and Sean Combs. His next film, Finding Neverland (2004), was based on the life of author J.M. Barrie. The film was nominated for five Golden Globe Awards and seven Academy Awards, including the Best Picture. Forster received BAFTA, Directors Guild of America, and Golden Globe nominations for his direction.

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