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Born in Sydney, Armfield was the youngest of three boys. The son of a factory worker at the nearby Arnott's Biscuits factory, he was brought up in the suburb of Concord adjacent to Exile Bay. He was educated at the (then) selective publicly funded Homebush Boys High School and the University of Sydney, graduating in 1977, and became Co-Artistic Director of the Nimrod Theatre Company in 1979. He joined South Australia's Lighthouse Theatre before returning to Sydney in 1985, where he was involved in the purchase of Belvoir St Theatre and the formation of Company B, becoming its first Artistic Director in 1994.
In April 2008 he was selected as a participant in the Towards a creative Australia strand of the Australia 2020 Summit. Armfield announced in 2009 that the 2010 season would be his last as Belvoir Artistic Director, but he has subsequently directed under the new Artistic Director Ralph Myers.
His homosexuality has informed much of his work.
For Company B, he has directed
For Opera Australia he has directed works such as Jenůfa, The Eighth Wonder, Tristan und Isolde and Billy Budd. In 2013 he directed Opera Australia's first full-length presentation of Richard Wagner's Ring Cycle, in Melbourne.