McFadden was born in Raleigh, North Carolina. He attended the University of Minnesota, where he received a B.S in Physics at age 19, and a Ph.D in Behavioral Science (Economics) five years later (1962). In 1964, he joined the faculty of the University of California, Berkeley and focused his research in areas including choice behavior and the problem of linking economic theory and measurement. In 1977, he moved to the Massachusetts Institute of Technology, but returned to Berkeley in 1991 because MIT did not have a statistics department. After his return, McFadden founded the Econometrics Laboratory, which is devoted to statistical computation for economics applications. He remains its director.