Based on his experiences working in Vietnam and Laos, he authored a number of popular anti-communist books in the years preceding the Vietnam War.

Dooley was born in St. Louis, Missouri and raised in a Catholic Irish-American household. He attended St. Louis University High School, went to college at the University of Notre Dame in 1944 and enlisted in the United States Navy's corpsman program, serving in a naval hospital in New York. In 1946 he returned to Notre Dame, and in 1948 entered the St. Louis University Medical School. When he graduated in 1953, after repeating his final year of medical school, he reenlisted in the navy. He completed his residency at Camp Pendleton, California and then at Yokusuka, Japan. In 1954 he was assigned to the USS Montague which was travelling to Vietnam to evacuate refugees.

While Dooley was working in refugee camps in Haiphong, he came to the attention of Lieutenant Colonel Edward G. Lansdale, head of the CIA detail in Saigon. Dooley was chosen as a symbol of Vietnamese-American cooperation, and was encouraged to write about his experiences in the refugee camps. He also reportedly collected intelligence for the CIA. In 1956 his book Deliver Us from Evil was released, establishing Dooley as a strong anti-communist in the United States. While on a promotional tour for the book, Dooley was accused and investigated for participating in homosexual activities, and was forced to resign from the navy in March 1956. The story of his forced resignation from the military can be found in the book Conduct Unbecoming by Randy Shilts.

After leaving the navy, Dooley went to Laos to establish medical clinics and hospitals under the sponsorship of the International Rescue Committee. Dooley founded the Medical International Cooperation Organization (MEDICO) under the auspices of which he built hospitals at Nam Tha, Muong Sing, and Ban Houei Sa. During this same time period he wrote two books, The Edge of Tomorrow and The Night They Burned the Mountain about his experience in Laos.

In 1959 Dooley returned to the United States for cancer treatment; he died in 1961 from malignant melanoma. Following his death John F. Kennedy cited Dooley's example when he launched the Peace Corps. He was also awarded a Congressional Gold Medal of Honor posthumously. There were unsuccessful efforts following his death to have him canonized as a Roman Catholic saint.