Dalén was born in Stenstorp, in present day Falköping municipality, Sweden.
He managed the family farm, which he expanded to include a market garden, a seed merchants and a dairy.
In 1892 he invented a milk-fat tester to check milk quality of the milk delivered. Gustaf de Laval was so impressed by the self-taught Dalén that he encouraged him to start studying.
He was admitted to the Chalmers University of Technology where he earned his Master's degree and a Doctorate on leaving in 1896.
Dalén married Elma Persson in 1901, they had two daughters and two sons, Gunnar and Anders