Falahee was born and raised in Ann Arbor, Michigan, to a speech-language pathologist and a doctor. He has Irish and Italian roots. As a child, Falahee attended a Catholic school described as strict. He began acting in theater while attending Huron High School. In 2011, Falahee graduated from the Tisch School of the Arts at New York University with a Bachelor of Fine Arts in Drama, where he studied acting and participated in a number of productions, including Love's Labour's Lost, A Midsummer Night's Dream, and Sondheim's Company.

His first film work was in 2012, a guest role in the comedy web series Submissions Only. That same year, he got the lead role in the short film Sunburn. He also studied acting at the International Theatre Workshop in Amsterdam.