Born in Brooklyn, New York, Donaldson was the son of singer-composer Will Donaldson and Will's wife, Jo. His mother died when he was 4 1/2 years old. His stepmother was radio organist and composer Muriel Pollock. He attended the Professional Children's School in New York City.
Donaldson began his acting career in December 1937 when he appeared in an NBC radio show. In 1941, he played Tiny Tim in a week-long serialized version of Dickens' A Christmas Carol that was presented on Wheatena Playhouse.
From 1949 to 1954, he played Bud, the son of Robert Young's character in the radio version of Father Knows Best. He was offered the same role on the television version of the series, but turned it down, saying, "I didn't want to be typed. I didn't want to be a 21-year-old playing a 15- or 16-year-old kid. I wanted to do other things." As an adult, he called that "one of the two or three most stupid things I have not done because not only would the salary have been very nice for five years, but the residuals would have also."
The performance led to a starring role as Arthur "Pinky" Thompson in his first movie, Once Upon a Time (1944), opposite Cary Grant and Janet Blair. Columbia Pictures put him under contract after the film was finished. In 1945, Donaldson was cast in A Tree Grows in Brooklyn, which marked the directorial debut of Elia Kazan.
Donaldson also starred as Danny Mitchell in the 1940s Rusty series of eight films about a German shepherd dog. At age 19, he had his last credited feature film role as Jerry Fortness in Phone Call from a Stranger (1952).
- Once Upon a Time (1944) as Arthur "Pinky" Thompson
- Mr. Winkle Goes to War (1944) as Barry
- A Tree Grows in Brooklyn (1945) as Neeley Nolan
- A Guy, a Gal and a Pal (1945)
- Adventures of Rusty (1945) as Danny Mitchell
- The Return of Rusty (1946)
- Personality Kid (1946)
- For the Love of Rusty (1947) as Danny Mitchell
- The Son of Rusty (1947)
- The Red Stallion (1947) as Joel Curtis
- My Pal (1947)
- Pal's Adventure (1948)
- My Dog Rusty (1948)
- Rusty Leads the Way (1948)
- The Decision of Christopher Blake (1948)
- Rusty Saves a Life (1949)
- The Green Promise (1949) as Phineas Matthews
- Rusty's Birthday (1949)
- Phone Call from a Stranger (1952)
- Flight Nurse (1953) (uncredited)
- Goldrup, Tom; Goldrup, Jim (2002). Growing Up on the Set: Interviews with 39 Former Child Actors of Classic Film and Television. McFarland. pp. 57–66. ISBN 9780786412549. Retrieved 2 November 2016.
- Collura, Joe (September 2016). "Ted Donaldson: A Natural". Classic Images (495): 76–81.
- "Holiday Serial". Broadcasting. December 15, 1941. p. 28. Retrieved 2016-06-12.
- Dunning, John (1998). On the Air: The Encyclopedia of Old-Time Radio (Revised ed.). Oxford University Press. pp. 243–244. ISBN 978-0-19-507678-3. Retrieved 2019-10-07.
- "Pop's New Boys". Daily News. New York, New York City. March 29, 1941. p. 21 B. Retrieved August 2, 2018 – via Newspapers.com.
- "Ted Donaldson". Growing Up on the Set: Interviews with 39 Former Child Actors of Classic Film and Television. Retrieved 6 February 2014.
- Goldrup, Tom and Jim (2002). Growing Up on the Set: Interviews with 39 Former Child Actors of Film and Television. McFarland & Co. pp. 57–66. ISBN 1476613702.
- Holmstrom, John (1996). The Moving Picture Boy: An International Encyclopaedia from 1895 to 1995. Norwich: Michael Russell, p. 184-185.
- Best, Marc (1971). Those Endearing Young Charms: Child Performers of the Screen. South Brunswick and New York: Barnes & Co. p. 74-79.