Dallara studied at the Politecnico di Milano, graduating with a degree in aeronautical engineering. His professional life began at Ferrari in 1960, where he gained early exposure to the highest level of Italian automotive engineering. The following year he moved to Maserati before being hired by Lamborghini in 1963 as their chief designer.
At Lamborghini, working alongside Paolo Stanzani and Bob Wallace, Dallara was instrumental in designing the chassis of two landmark road cars: the Lamborghini Espada and the Lamborghini Miura. The Miura in particular was a defining machine of its era, its mid-engine layout widely influencing the direction of subsequent supercar design.
In 1969 Dallara moved into racing car design in earnest, beginning work for Frank Williams and the fledgling Williams Formula One operation. That same year he co-founded the Autodromo Riccardo Paletti in Varano, near his home city of Parma, a circuit that would later serve as a development and testing venue closely associated with his own company.
In 1972 Dallara established Dallara Automobili in Varano. From 1974 the company began designing Formula One cars for the Williams team, including the Iso-Marlboro IR. Alongside this F1 work, Dallara developed race cars to Formula 3 standards, achieving victories in Italy, France, England, Switzerland, Germany, Japan, the United States, Russia, and Austria.
In 1997 Dallara and his company expanded into IndyCar racing. The move proved transformative: from 1998 through 2003 the Dallara chassis accumulated multiple IndyCar victories, and since 2007 Dallara has served as the sole chassis supplier for the entire IndyCar Series — a position that underlines the company's engineering reputation and commercial standing.
Dallara returned to F1 interest in the mid-1990s. In 1991 the company designed a car for Scuderia Italia, powered by a Judd V10 engine. At the end of 1998 Honda, considering a return to Formula One as a constructor, engaged Dallara to design their new F1 chassis. Honda subsequently cancelled the project before it reached the grid.
In 2009, Dallara was engaged to build an F1 chassis for the new Campos Grand Prix entry — a team that later became known as Hispania Racing — for the 2010 season. The involvement reflected the ongoing market for Dallara's engineering expertise in competition categories where cost and design quality are paramount.
Beginning in 2000, following the cancellation of the Honda F1 project, Dallara undertook a new programme building a race car for the French team Oreca for competition in the Le Mans Series. In August 2004 it was announced that Dallara had been signed by Alex Shnaider to build a chassis for the former Jordan team infrastructure, then being reorganised as Midland. Gary Anderson was brought in to assist with the project, though Dallara withdrew from the arrangement by mid-2005.
Giampaolo Dallara's career spans road car engineering, Formula One, IndyCar, Formula 3, sportscar racing, and beyond. His founding of Dallara Automobili created an institution that outlasted many of the teams and constructors it originally served. The company's role as the exclusive IndyCar chassis supplier from 2007 onwards, combined with its deep presence in Formula 2, Formula 3, and various national formulae, makes Dallara one of the most widely used chassis brands in professional motorsport history. Dallara was also recognised for civic engagement in his home city when he became an investor in football club Parma Calcio 1913 in 2015.