Daniel Edward Barbey was born in Portland, Oregon on 23 December 1889. He graduated from the Naval Academy and was commissioned an ensign in June 1912. His first assignment was aboard the armored cruiser , which participated in the 1912 United States occupation of Nicaragua. In May 1914 he was transferred to the destroyer as engineering officer, participating in the United States occupation of Veracruz. He remained on "Lawrence", where he was promoted to lieutenant (junior grade) on 8 June 1915, serving first as engineering officer, and later as executive officer and commanding officer. In October 1916 he became engineering officer of the gunboat , serving in Central American and Mexico waters. He received a Letter of Commendation from the Secretary of the Navy for the ship's service during the Mexican Revolution. Barbey was involved in the fitting out of the destroyer from December 1917 to May 1918, becoming its executive officer when it was commissioned on 24 May. Under an accelerated wartime promotion system, he was promoted to Lieutenant on 8 June 1918.