Hagen was born in Chicago, Illinois, to professional ballroom Dancers, Haakon Olaf Hagen and the former Marvel Lucile Wadsworth. When Haakon Hagen deserted his family, young Hagen was reared by his mother, grandmother, and aunts. As a 15-year-old, he relocated to Portland, Oregon, where one of his aunts had taken a teaching job. He attended Portland's Jefferson High School. His family returned to Chicago, and he attended Oregon State University in Corvallis and later the University of Southern California in Los Angeles, California, from which he received a degree in international relations. He spent a year in law school at the University of California, Los Angeles, and was subsequently employed by the U.S. State Department in West Germany, followed by a two-year stint in the United States Navy. For a time, he taught ballroom dancing, the specialty of his parents, for the Arthur Murray Company. Then, at the age of 27, he tried acting. He was spotted in a production of Eugene O'Neill's Desire Under the Elms and given a guest-starring role on the classic 1950s police series Dragnet, starring Jack Webb.

Hagen began to work steadily in television and film. His first regular role on a series was in 1958 in the CBS Western Yancy Derringer, starring Jock Mahoney in the title role. Hagen played John Colton, the city administrator of New Orleans, around 1868. At the beginning of each episode, Colton asks Derringer to halt some threat facing the city; at the end of each segment, he arrests Derringer for breaking the law to solve the crisis.

On April 29, 1962, Hagen was cast as the lead guest star in another Western series, in the episode "Cort" of Lawman with John Russell and Peter Brown. In the story line, Cort Evers, who is much younger than he appears, seeks revenge against his brother Mitch (Harry Carey, Jr.), whom he mistakenly blames for betraying six Union Army prisoners from their hometown during the American Civil War. Mitch is compelled to confront Cort in a shootout, during which he explains that Cort himself, under the influence of a fever, had betrayed the prisoners. Cort faints to the ground as he remembers the startling truth of the betrayal.

Hagen considered his big break to be the role of a Confederate renegade who kills James Stewart's son and daughter-in-law in the 1965 film Shenandoah. His most famous role was one of his most pleasant, as kindly Doc Baker on Michael Landon's Little House on the Prairie. He played the part of Doc Baker from 1974 to 1983, as well as in a one-man show, A Playful Dose of Prairie Wisdom.

Hagen was married to Actress Susanne Cramer until her death in 1969.

In 1992, he moved to Grants Pass in southwestern Oregon, and continued his acting career. In 2004, he was diagnosed with esophageal cancer.

Hagen died on July 9, 2005, at his home in Grants Pass. At the time of his death, Hagen left a widow, Jan, his fourth wife, whom he met in 1993, and a son, Kristopher.