Born in Colwyn Bay, Dalton claims a mixed Italian-Irish and English ancestry. The family moved to Belper, south of Manchester soon after his birth. Dalton became interested in acting at a young age. Leaving school in 1964 he enrolled at RADA and toured with the National Youth Theatre in the summers. He did not complete his studies at RADA, leaving in 1966 to work professionally at the Birmingham Repertory Theatre. He was quick to move into television work, mainly with the BBC, and in 1968 he appeared in his first film, The Lion in Winter, the first in a number of costume dramas.
After a number of films he took a break from 1971 - 75 to concentrate on theatre, performing with the Royal Shakespeare Company and others across the world. After a brief return to film work he again concentrated on theatre until 1978 when he made is first film in the United States and made his first US television appearance. The majority of his US work was on television but he made a number of European films and produced some notable performances for the BBC.
Following the final retirement of Roger Moore as James Bond, Dalton was approached to replace him, initially work commitments made him refuse but when he was asked a second time he agreed to three Bond films. The Living Daylights (1987) was the first and was a reasonable success, but the follow-up License to Kill (1989) was a flop. Featuring a Bond who was closer to the literary character, the darker bond and a lacklustre marketing campaign did much to depress the film's chances. The third film became lost in litigation over the rights between EON and Danjaq, and in 1994 Dalton officially dropped the role.
After his Bond films Dalton's career entered an uncertain period, success on stage and television was balanced by a number of indifferent film ventures.