Natali was born in Detroit, to a nursery school teacher/painter mother and a photographer father. He is of Italian and English descent. He moved to Toronto, along with his family, at the age of one. During his time at Royal St. George's College, Natali befriended British-born Canadian actor David Hewlett, who has appeared in the majority of films that Natali has directed. Natali also attended the film programme at Ryerson Polytechnical Institute. He was eventually hired as a storyboard artist at the Nelvana Animation Studios. His cinematic influences included Samuel Beckett, David Cronenberg, and Terry Gilliam.
Natali's directing debut came in 1997, when he directed Cube which he also co-wrote. The film became a success worldwide, especially in Japan and France, grossing $15 million in the latter country, and breaking box office records for a Canadian film. At the 19th Genie Awards, the film received five nominations, and also won the award for Best Canadian First Feature at the Toronto International Film Festival. After this success, Natali went on to direct Cypher (2002) and Nothing (2003).
Following the June 2010 release of Splice (2009), Natali's next efforts were expected to be an adaptation of J. G. Ballard's 1975 novel High Rise and a 3D adaptation of the Len Wein/Berni Wrightson comic book character Swamp Thing, for producer Joel Silver. A May 2010 item in The Hollywood Reporter, however, announced that Natali was to replace Joseph Kahn as director of the highly anticipated adaptation of cyberpunk author William Gibson's 1984 novel Neuromancer.

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