Daniels was born in Minneapolis, Minnesota on March 8, 1889. Daniels began day school in 1895 at the Kenwood School and then on to Douglas School. As a boy, he was fascinated with Thomas Edison, Samuel F. B. Morse, Alexander Graham Bell, and John Charles Fields. He decided early that he wanted to be an electrician and inventor. He attended Central and East Side high schools. By this point he liked chemistry and physics, but equally enjoyed “Manual Training."
In 1906 he entered the University of Minnesota, majoring in chemistry and adding to the usual mathematics and analytical courses some courses in botany and scientific German. He was initiated into the Beta Chapter of Alpha Chi Sigma in 1908. He sometimes worked summers as a railroad surveyor. He took his degree in chemistry in 1910. The following year he spent half his time in teaching and received an M.S. for graduate work in physical chemistry. He entered Harvard in 1911, paying for his studies partly through a teaching fellowship, and received a Ph.D. in 1914. His doctoral research on the electrochemistry of thallium alloys was supervised by Theodore William Richards.
In the summer of 1912, Daniels had visited England and Europe. After earning his Ph.D., Harvard would have sent him on a traveling fellowship in Europe, but World War I broke out. So instead he accepted a position as instructor at the Worcester Polytechnic Institute, where, besides teaching, he found he had considerable time for research in calorimetry, for which he received a grant from the American Academy of Arts and Sciences. He joined the University of Wisconsin in 1920 as an assistant professor in 1920, and remained until his retirement in 1959 as chairman of the chemistry department.
Daniels was director of the Metallurgical Laboratory of the Manhattan Project and, after the war, became concerned to limit or stop the nuclear arms race. In that regard, he became a Board Member of the Bulletin of the Atomic Scientists.
In 1947 Daniels conceived the pebble bed reactor, in which helium rises through fissioning uranium oxide or carbide pebbles and cools them by carrying away heat for power production. The "Daniels' pile" was an early version of the later high-temperature gas-cooled reactor developed further at ORNL without success, but later being developed as nuclear power plant by Rudolf Schulten.
Daniels is also known for writing several textbooks on physical chemistry, including Mathematical preparation for physical chemistry (1928), Experimental physical chemistry, co-authored with J. Howard Mathews and John Warren (1934), Chemical Kinetics (1938), Physical Chemistry, co-authored with Robert Alberty (1957). Some of these books went through many subsequent editions until about 1980.
He was awarded the Priestley Medal in 1957.
Daniels died on June 23, 1972 from complications from liver cancer. He was survived by his wife, four children, and twelve grandchildren.
He was inducted posthumously to the Alpha Chi Sigma Hall of Fame in 1982.