Fadden was born in Bayard, Iowa on January 6, 1895; his father was a mining Engineer. Early in life the family moved further west, moving from state to state, including the Dakotas, Colorado, Wyoming Idaho, Oregon and Nebraska. It was in Nebraska where Fadden would attend college, graduating from Creighton University.

After graduating college, Fadden joined a theater company in Omaha, Nebraska in 1915. He would act in stock companies and vaudeville during the 1910s and 1920s. In 1924 he would make his Broadway debut, starring as Peter Jekyll in The Wonderful Visit, a play based on the novel of the same name by H. G. Wells, who also co-wrote the play. Over the next fifteen years he would appear in almost two dozen productions on the Great White Way, including such notable productions as Nocturne (1925), The Butter and Egg Man (1925–26), Elmer Gantry (1928), The Petrified Forest (1935) and Our Town (1938). It was during a revival of The Butter and Egg Man in London where Fadden would meet and marry his first wife, Genevieve Bartolocci.

He would make his film debut with a small role in 1939's I Stole a Million, which stars George Raft and Claire Trevor. He would have his first memorable bit in his next film, Destry Rides Again, starring Marlene Dietrich and James Stewart, where in the opening scene he is playing cards, and is cheated when Dietrich distracts him by spilling coffee in his lap. His film career would span almost forty years, and encompass over 90 films, mostly in small or supporting roles, although with an occasional starring role, as in 1940's Zanzibar. The 1940s would see him appear in other classic and notable films such as: the Bob Hope comedy, My Favorite Blonde (1942); Pardon My Sarong (1942), starring the comedy team of Abbott and Costello; The Naughty Nineties (1945), again starring Abbott and Costello; the film noir, The Big Sleep (1946), starring Humphrey Bogart and Lauren Bacall; and 1946's It's a Wonderful Life, where he had a particularly memorable scene as the Tollhouse Keeper on the bridge, who reacts to Clarence's (the angel) explanation of who he is to George Bailey (James Stewart).

The 1950s would see Fadden continue to appear in several notable films, including: Dallas (1950), starring Gary Cooper and Ruth Roman; 1956's Invasion of the Body Snatchers, where his character is one of the first victims to succumb to the alien invaders; and Baby Face Nelson (1957), starring Mickey Rooney and Carolyn Jones. Fadden would also begin forays into the acting world of the small screen. One of his first television roles was that of Eben Kent, the earthman who adopts Kal-El on the inaugural episode of The Adventures of Superman. He would appear in numerous other television shows during the decade, including recurring roles on Broken Arrow (1956–58) and Cimarron City (1958–59). Although he would appear in only a handful of films in the 1960s, he would work regularly on television during the decade, including a recurring role on Petticoat Junction. His final acting credit was the 1977 science fiction horror film, Empire of the Ants, starring Joan Collins.

Fadden died of natural causes on April 14, 1980 in Vero Beach, Florida, and survived by his second wife, Jane.