Born Joseph Aloysius Dwan in Toronto, Ontario, Canada, his family moved to the United States when he was eleven years of age. At university, he trained as an engineer and began working for a lighting company in Chicago, Illinois. However, he had a strong interest in the fledgling motion picture industry and when Essanay Studios offered him the opportunity to become a scriptwriter, he took the job. At that time, some of the East Coast movie makers began to spend winters in California where the climate allowed them to continue productions requiring warm weather. Soon, a number of movie companies worked there year-round and, in 1911, Dwan began working part time in Hollywood. While still in New York, in 1917 he was the founding president of the East Coast chapter of the Motion Picture Directors Association.

Allan Dwan became a true innovator in the motion picture industry. After making a series of westerns and comedies, he directed fellow Canadian, Mary Pickford in several very successful movies as well as her husband, Douglas Fairbanks, notably in the acclaimed 1922 Robin Hood.

Following the introduction of the talkies, in 1937 he directed child-star Shirley Temple in Heidi and Rebecca of Sunnybrook Farm the following year.

Over his long and successful career spanning over fifty years, he directed over 400 motion pictures, many of them highly acclaimed, such as the 1949 box office smash, The Sands of Iwo Jima. His last movie was in 1961.

Dwan is one of the directors who spanned the silent to sound era. Most of the silent movies he directed are lost due to poor preservation. Little historical writing has been devoted to Dwan, but some believe that he will be the last "discovered" great director from the Classic Hollywood Era.

He died in Los Angeles at the age of ninety-six, and is interred in the San Fernando Mission Cemetery, Mission Hills, California.

Allan Dwan has a star on the Hollywood Walk of Fame at 6263 Hollywood Boulevard in Hollywood.