When Dayne was a child, his parents divorced, and he was sent to live with relatives. His athleticism and speed made him a star running back at Overbrook High School in his hometown of Pine Hill, New Jersey, and he was heavily recruited by many colleges.  He also excelled at track and field. In 1995, he won the New Jersey Meet of Champions, setting a new meet record in the discus throw. In 1996, he won state titles in both the shot put and discus, breaking both meet records. He won the Meet of Champions in both events and breaking his own meet record in the discus. He has the fifth-best distance ever thrown in the discus by a U.S. high school athlete at 216 feet, 11 inches (66.12m).
His football role was expected to change when he reached college. At 270 pounds out of high school, many felt that he was too big to be a tailback and believed he would be best suited as a fullback. Eventually, coach Barry Alvarez promised Dayne a tailback position and persuaded him to come to play for the University of Wisconsin.
He attended the University of Wisconsin-Madison, where he played for the Wisconsin Badgers football team from 1996 to 1999. Known as the "Great Dayne" and "The Dayne Train" throughout college, Dayne was the starting running back all four years at Wisconsin. Not a flashy or boisterous player, Dayne was a workman-like back, expected to carry the ball as much as necessary. He had 1,220 carries during his career.
Over his four seasons, Dayne set the NCAA Division I-A rushing record for total yards in a career. He gained 1,863 yards as a freshman, 1,421 as a sophomore, 1,325 as a junior, and 1,834 as a senior. He finally broke the record in the final game of the 1999 season against Iowa. Dayne ended his career with 6,397 rushing yards (which does not include yardage from the four bowl games he played in), eclipsing the record set the previous year by Ricky Williams of Texas.
Dayne excelled in three bowl games for Wisconsin. He rushed for 246 to lead the Badgers to a 38–10 victory in the 1996 Copper Bowl against Utah, garnering MVP honors. Dayne only gained 36 yards in the 1998 Outback Bowl loss against Georgia the next season, but bounced back the next two seasons with 246 yards and 200 yards, respectively, in the Badgers' 1999 and 2000 Rose Bowl wins. Dayne won MVP honors in both games, becoming only the third player in the history of the Rose Bowl to repeat as MVP — and the first and still only Big Ten player to do so. Bob Schloredt (Washington/AAWU), Charles White (USC/Pac-10) were the first two, and Vince Young (Texas/Big 12) has subsequently accomplished this feat.
As of 2016[update], Dayne's 6,397 career yards is second in the Division I-A (now FBS) career rushing list, trailing only Donnel Pumphrey of San Diego State. When yardage from bowl games is included,[lower-alpha 1] he amassed 7,125 yards. He shares the record for most 200-yard rushing games with Ricky Williams and Marcus Allen, with twelve. He is one of only eight players in NCAA history to rush for over a thousand yards in each of his four seasons.
Dayne was selected with the 11th pick of the 2000 NFL Draft by the New York Giants. In Dayne's first season he teamed up with Tiki Barber in the backfield to create the tandem known as "Thunder and Lightning," a combination of Dayne's power and Barber's speed. The Giants went on to play in Super Bowl XXXV. Over the next few years, Dayne's carries slowly diminished, with head coach Jim Fassel growing increasingly disappointed with Dayne's lack of commitment to lose weight. Fassel also did not like Dayne's halfback running style, and tried to make him a goal line back. After Fassel was fired, Dayne shed 40 pounds and received a second chance under new head coach Tom Coughlin. Dayne saw minimal playing time during the 2004 regular season. The Giants did not attempt to re-sign Dayne, and he later signed a one-year deal with the Denver Broncos for the 2005 season. He was re-signed in the 2006 offseason and named the starter, but fell on the depth chart as the pre-season went along and was cut on September 2, 2006. The Houston Texans claimed Dayne off waivers the following day.
As a member of the Houston Texans, Dayne rushed for 429 yards and five touchdowns in December 2006. In 2007, he filled in for the injured Ahman Green. Dayne did not play in the NFL after the 2007 season.