Fallon's family moved to Canada when he was a child. At age 18, he was in St. Louis and joined the third expedition of John C. Frémont to California. Early in 1846, Fallon stayed in Santa Cruz after Frémont visited the area. In June 1846, he raised a group of 22 Santa Cruz-area volunteers to join Fremont, appointing himself captain. When the Mexican–American War began in California with Commodore John D. Sloat's capture of Monterey on July 7, Fallon's force crossed the Santa Cruz Mountains to capture the El Pueblo de San José de Guadalupe (now the City of San José) without bloodshed, on July 11. On July 14, 1846 he received an American Flag from Sloat, which he raised over the juzgado of San Jose, the pueblo's administrative building. Fallon's volunteers then joined Fremont's California Battalion for the remainder of the war.
