William Daly was born in Cincinnati, Ohio, the son of a successful song-and-dance man.[3] He attended Harvard University receiving a Bachelor of Arts degree in 1908. By 1911 he was a writer, editor, and eventually general manager for Everybody's Magazine in New York.[4] Daly left the company in 1914 to pursue a show business career. He married in 1915 settling in New York City.[3]
Daly played piano with various Broadway orchestras, and in time established himself as a songwriter, arranger, orchestrator, and music director, conducting more than twenty shows between 1915 and 1934.[4] He met George and Ira Gershwin in the late 1910s. Daly and George Gershwin collaborated on several Broadway scores. Both contributed songs to Piccadilly to Broadway (1920), a show which closed in Atlantic City, and For Goodness' Sake (1922). The two jointly composed the score for Our Nell in 1923. This was the beginning of a long friendship; Daly was a frequent arranger, orchestrator and conductor of Gershwin's music, and Gershwin periodically turned to him for musical advice.[4] Gershwin dedicated his 1926 Preludes for Piano to Daly.