Hanen was born in Elgin, Illinois, but was raised in Waco, Texas. He received a B.A., with honors, from Denison University in 1975 and a J.D. from Baylor Law School in 1978, where he graduated first in his class. He was a briefing attorney to the Hon. Joe Greenhill, Chief Justice of the Supreme Court of Texas, from 1978 to 1979. He was then in private practice in Houston, Texas from 1979 to 1993.

On February 16, 2015, Hanen ordered a halt to President Obama's executive actions on immigration announced on November 20, 2014. Hanen's injunction blocked key elements of the immigration initiative, most notably the provision protecting illegal immigrants who came to the United States as children and a program that grants a deferred status to illegal immigrants who are the parents of U.S. citizens or legal residents.