Dulles was born on April 7, 1893, in Watertown, New York, one of five children of Presbyterian minister Allen Macy Dulles, and his wife, Edith F. (Foster). He was five years younger than his brother John Foster Dulles, Dwight D. Eisenhower's Secretary of State and chairman and senior partner of Sullivan & Cromwell, and two years older than his sister, diplomat Eleanor Lansing Dulles. His maternal grandfather, John W. Foster, was Secretary of State under Benjamin Harrison, while his uncle by marriage, Robert Lansing was Secretary of State under Woodrow Wilson. Dulles was uncle to Avery Dulles, a Jesuit priest and cardinal of the Catholic Church, who taught theology at Fordham University from 1988 to 2008.
Dulles graduated from Princeton University, where he participated in the American Whig–Cliosophic Society, and entered the diplomatic Service in 1916. In 1920, he married Clover Todd (March 5, 1894 – April 15, 1974). They had three children; two daughters: Clover D. Jebsen, ("Toddy"), and Joan Buresch Dulles Molden, ("Joan Buresch"); and one son, Allen Macy Dulles Jr., who was wounded and permanently disabled in the Korean War and spent the rest of his life in and out of medical care. According to his sister, Eleanor, Dulles had "at least a hundred" extramarital affairs, including some during his tenure with the CIA.
Initially assigned to Vienna, he was transferred to Bern, Switzerland along with the rest of the embassy personnel shortly before the U.S. entered the First World War. Later in life Dulles claimed to have been telephoned by Vladimir Lenin, seeking a meeting with the American embassy on April 8, 1917, the day before Lenin left Switzerland to travel to Saint Petersburg aboard a German train. After recovering from the 1918 flu pandemic he was assigned to the American delegation at the Paris Peace Conference, along with his older brother Foster. From 1922-6, he served five years as chief of the Near East division of the Department of State.
During the late 1920s and early 1930s, he served as legal adviser to the delegations on arms limitation at the League of Nations. There he had the opportunity to meet with Adolf Hitler, Benito Mussolini, Soviet Foreign Minister Maxim Litvinov, and the Leaders of Britain and France. In 1935 Dulles returned from a Business trip to Germany appalled by the Nazi treatment of German Jews and, despite his brother's objections, led a movement within the law firm of Sullivan & Cromwell to close their Berlin office. As a result of Dulles' efforts, the Berlin office was closed and the firm ceased to conduct Business in Nazi Germany.
In 1921, while at the US Embassy in Istanbul, he helped expose the Protocols of the Elders of Zion as a forgery. Dulles unsuccessfully attempted to persuade the US State Department to publicly denounce the forgery.
In 1926, he earned a law degree from George Washington University Law School and took a job at Sullivan & Cromwell, the New York firm where his brother, John Foster Dulles, was a partner. He became a Director of the Council on Foreign Relations in 1927, the first new Director since the Council's founding in 1921. He was the Council's secretary from 1933 to 1944.
As the Republican Party began to divide into isolationist and interventionist factions, Dulles became an outspoken interventionist, running unsuccessfully in 1938 for the Republican nomination in New York's Sixteenth Congressional District on a platform calling for the strengthening of U.S. defenses. Dulles collaborated with Hamilton Fish Armstrong, the Editor of Foreign Affairs magazine, on two books, Can We Be Neutral? (1936), and Can America Stay Neutral? (1939). They concluded that diplomatic, military, and economic isolation, in a traditional sense, were no longer possible in an increasingly interdependent international system. Dulles helped a number of German Jews, such as the banker Paul Kemper, escape to the United States from Nazi Germany.
Dulles was involved in Operation Sunrise, secret negotiations in March 1945 to arrange a local surrender of German forces in northern Italy. After the war in Europe, Dulles served for six months as the OSS Berlin station chief and later as station chief in Bern. The Office of Strategic Services was dissolved in October 1945 and its functions transferred to the State and War Departments.
In the 1948 Presidential election, Dulles was, together with his brother, an advisor to Republican nominee Thomas E. Dewey. The Dulles brothers and James Forrestal helped form the Office of Policy Coordination. During 1949 he co-authored the Dulles–Jackson–Correa Report, which was sharply critical of the Central Intelligence Agency, which had been established by the National Security Act of 1947. Partly as a result of the report, Truman named a new Director of Central Intelligence, Lieutenant General Walter Bedell Smith.
In the early 1950s, the United States Air Force conducted a competition for a new photo reconnaissance aircraft. Lockheed Aircraft Corporation's Skunk Works submitted a design number called the CL-282, which married sailplane-like wings to the body of a supersonic interceptor. This aircraft was rejected by the Air Force, but several of the civilians on the review board took notice, and Edwin Land presented a proposal for the aircraft to Dulles. The aircraft became what is known as the U-2 'spy plane', and it was initially operated by CIA pilots. Its introduction into operational Service in 1957 greatly enhanced the CIA's ability to monitor Soviet activity through overhead photo surveillance. The aircraft eventually entered Service with the Air Force. The Soviet Union shot down and captured a U-2 in 1960 during Dulles' term as CIA chief.
DCI Smith recruited Dulles to oversee the agency's covert operations as Deputy Director for Plans, a position he held from January 4, 1951. On August 23, 1951, Dulles was promoted to Deputy Director of Central Intelligence, second in the intelligence hierarchy. After the election of Dwight Eisenhower in 1952, Bedell Smith shifted to the Department of State and Dulles became the first civilian Director of Central Intelligence.
In 1953, Dulles was involved, along with Frank Wisner, in Operation Ajax, the covert operation that led to the removal of democratically elected prime minister of Iran, Mohammad Mossadegh, and his replacement with Mohammad Reza Pahlavi, Shah of Iran. Rumors of a Soviet takeover of the country had surfaced due to the nationalization of the Anglo-Iranian Oil Company. British diplomat Christopher Woodhouse had proposed the idea of a coup d'état to President Eisenhower to try to regain British control of the oil company.
President Jacobo Arbenz Guzman of Guatemala was removed in 1954 in a CIA-led coup carried out under the code name Operation PBSUCCESS.
During the Kennedy Administration, Dulles faced increasing criticism. In autumn 1961, following the Bay of Pigs incident and Algiers putsch against Charles de Gaulle, Dulles and his entourage, including Deputy Director for Plans Richard M. Bissell Jr. and Deputy Director Charles Cabell, were forced to resign. On November 28, 1961, Kennedy presented Dulles with the National Security Medal at the CIA Headquarters in Langley, Virginia. The next day, November 29, the White House released a resignation letter signed by Dulles.
Dulles published the book The Craft of Intelligence in 1963 and edited Great True Spy Stories in 1968.
He died on January 29, 1969, of influenza, complicated by pneumonia, at the age of 75, in Georgetown, D.C. He was buried in Green Mount Cemetery in Baltimore, Maryland.