Henry Hallett Dale was born in Islington, London, to Charles James Dale, a pottery manufacturer from Staffordshire, and his wife, Frances Anne Hallett, daughter of a furniture manufacturer. Henry was the third of seven children, one of whom (his younger brother, Benjamin Dale) became an accomplished Composer and warden of the Royal Academy of Music. Henry was educated at the local Tollington Park College and then The Leys School Cambridge (one of the school's houses is named after him) and in 1894 entered Trinity College, Cambridge, working under the Physiologist John Langley. For a few months in 1903 he also studied under Paul Ehrlich in Frankfurt, Germany. Also in 1903, Dale assisted Ernest Starling and william Bayliss in the vivisection of a dog, by removing the dog's pancreas and then killing the dog with a knife, which ultimately led to the events of the Brown Dog affair. Dale received his Doctor of Medicine degree from Cambridge in 1909.

In 1904, Dale had married his first cousin Elen Harriet Hallett and had a son and two daughters. One of their daughters, Alison Sarah Dale, married Alexander R. Todd, who too won the Nobel Prize and served as President of the Royal Society from 1940 to 1945.

Dale was elected a Fellow of the Royal Society (FRS) in 1914. He was knighted in 1932, receiving the Knight Grand Cross of the Order of the British Empire in 1943 and the Order of Merit in 1944. He served as President of the Royal Society from 1940 to 1945 and President of the Royal Society of Medicine from 1948 to 1950. The Sir Henry Dale Fellowships of the Wellcome Trust are named in his honour and the Society for Endocrinology awards the Dale Medal annually in his honour.

Between 1938 and 1960 Dale was Chairman of the Wellcome Trust.

During the 1940s Dale was embroiled in the scientific debate over the nature of signaling at the synapse. Dale and others believed that signaling at the synapse was chemical, while John Carew Eccles and others believed that the synapse was electrical. It was later found that most synaptic signalling is chemical, but there are some synapses that are electrical.

Dale also originated the scheme used to differentiate neurons according to the neurotransmitters they release. Thus, neurons releasing noradrenaline (known in the United States as norepinephrine) are called noradrenergic, neurons releasing GABA are GABAergic, and so on. This is called Dale's principle (sometimes erroneously referred to as Dale's Law), one interpretation of which holds that each neuron releases only one type of neurotransmitter. This particular interpretation of Dale's principle has been shown to be false, as many neurons release neuropeptides and amino acids in addition to classical neurotransmitters such as acetylcholine or biogenic amines (see cotransmission) (Bear, et al. 2001). This finding, that numerous neurotransmitters can be released by the same neuron, is referred to as the "coexistence principle." This phenomenon was most popularized by the Swedish neuroanatomist and neuropharmacologist Tomas Hökfelt, who is considered to be the "Father of the Coexistence Principle."