Rathbone was born in Singapore and has lived in places ranging from Indonesia to Midland, Texas. He started out in local theatre in Midland, Texas with the youth actors program The Pickwick Players, initially doing musical theater. For his junior and senior years of high school, Rathbone attended the Interlochen Arts Academy, a private school for the arts in Michigan, where he majored in acting. After graduation, he had planned to go to the Royal Scottish Academy, but went instead to Los Angeles to experiment with the big screen.
After being in Los Angeles for a short time, Rathbone was cast in Disney 411, where he interviewed up-and-coming personalities like Hilary Duff and the sister duo Aly & AJ. He has also had guest roles on The O.C. and Close to Home. His movie roles include work in Molding Clay, Pray for Morning, and Travis and Henry. In 2008, he played Jasper Hale in the movie Twilight, based on the best-selling novel by Stephenie Meyer. Rathbone will be playing the role of Sokka in The Last Airbender, a 2010 film based on the animated series.