Gallagher was born in Burtonport, a fishing port in The Rosses in the west of County Donegal in Ireland. He is the grandson of Paddy 'the Cope' Gallagher, of the Irish Co-Operative movement. He was educated at Dungloe Secondary School - Rosses Community School, St. Enda's College, Galway, and University College, Galway (UCG), where he graduated with a Bachelor of Commerce in 1970. He worked as a fish exporter until 1982, becoming involved in local politics in 1979.
His middle name 'The Cope' refers to his family connection to The Cope agricultural cooperative which operates in The Rosses area of West Donegal. This name is used in his profile on the Fianna Fáil website and on the European Parliament website. Gallagher was a member of the European Parliament's Committee on Fisheries and also serves as Chairman of the delegation for relations with Switzerland, Iceland and Norway and to the European Economic Area (EEA) Joint Parliamentary Committee.
Gallagher's wife, Ann Gillespie, and her sister, Eibhlin, both served almost 10 years of a 15-year sentence for conspiracy and explosive charges. In 1974 the sisters were visiting a house in Manchester when a bomb being made there exploded.
Gillespie maintains her innocence, saying police used evidence from a discredited scientist, Frank Skuse, but does not wish to reopen the case. In 2005 Gillespie's solicitor, Gareth Peirce, stated she believed that the case could have been successfully re-opened.
Gallagher was first elected to Dáil Éireann at the 1981 general election, retaining his seat until retiring at the 1997 general election. Gallagher was appointed Minister of State at the Department of Marine from 12 March 1987 to 12 July 1988. Appointed Minister of State at the Department of the Gaeltacht from 19 July 1987, serving in that post until 11 February 1992 and again in the same post from 13 February 1992 until 12 January 1993. Appointed Minister of State at the Department of the Arts, Culture and the Gaeltacht from 14 January 1993 to 15 June 1994.
In 1994, he was elected to the European Parliament as an MEP for the Connacht–Ulster constituency, and was re-elected at the 1999 European Parliament election. During his period in Europe, Gallagher was a member of a number of committees including Fisheries, Economics and Monetary and Industry and Energy.
He returned to domestic politics to successfully contest the 2002 general election, and he was appointed Minister of State at the Department of the Environment and Local Government from 18 June 2002 to 29 September 2004. In Bertie Ahern's cabinet reshuffle in 2004, he received the portfolio of Minister of State at the Department of Environment and Local Government at the Department of Communications, Marine and Natural Resources from 29 September 2004 to 14 February 2006. Following a period in this role, Gallagher was moved to the Department of Transport, Tourism and Sport, as Minister of State at the Department of Transport from 14 February 2006 where he served until 14 June 2007. From 20 June 2007 to 12 May 2008, he served as Minister of State at the Department of Health and Children with special responsibility for Health Promotion and Food Safety. He was not re-appointed as a Minister of State after Brian Cowen became Taoiseach in May 2008.
He was elected as an MEP for the North-West constituency at the 2009 European Parliament election. Immediately thereafter Gallagher replaced Brian Crowley as the head of Fianna Fáil's European delegation; this promotion came in the aftermath of Crowley publicly attacking the party's decision to join the European Liberal Democrat and Reform Party. Gallagher is a member of the European Parliament's Committee on Fisheries
In addition to being a serving politician in Europe, Gallagher receives annual pension payments of €70,562 a year from his time as a TD and junior minister. He has stated that he donates the entire amount to charitable causes.
He narrowly lost his seat at the 2014 European Parliament election.
In the 2016 general election, after a redrawing of constituency boundaries, Gallagher ran alongside Charlie McConalogue as the two Fianna Fáil candidates in the new five-seater Donegal constituency. He was elected on the 11th count, after McConalogue was elected on the first count.