Martin was born in Waco, Texas, the son of Mary Lee Martin and Glenn Vernon Martin, a real estate salesman and an aspiring actor.

Martin was raised in Inglewood, California and then later in Garden Grove, California, in a Baptist family. One of his earliest memories is of seeing his father, as an extra, serving drinks onstage at the Call Board Theatre on Melrose Place. During World War II, in England, Martin’s father had appeared in a production of Our Town with Raymond Massey. Years later, he would write to Massey for help in Steve’s fledgling career, but would receive no reply. Expressing his affection through gifts of cars, bikes, etc., Martin’s father was not emotionally open to his son. He was proud but extremely critical, with Martin later recalling that in his teens his feelings for his father were mostly ones of hatred.

Martin’s first job was at Disneyland, selling guidebooks on weekends and full-time during the summer school break. That lasted for three years (1955–1958). During his free time he haunted the Disneyland magic shop, Merlin’s Magic Shop, where tricks were demonstrated to the potential customers. By 1960 he had mastered several of the tricks and illusions, and took a job there in August 1960. There he perfected his talents for magic, juggling, and creating balloon animals frequently performing for tips.

After high school graduation, Martin attended Santa Ana Junior College, taking classes in drama and English poetry. In his free time he teamed up with friend and Garden Grove High School classmate Kathy Westmoreland to participate in comedies and other productions at the Bird Cage Theatre, a theater concession inside Knott’s Berry Farm. Later, he met budding actress Stormie Sherk, and they developed comedy routines while becoming romantically involved. Stormie’s influence caused Steve to apply to the California State University, Long Beach for enrollment with a major in Philosophy. Stormie enrolled at UCLA, about an hour’s drive north, and the distance eventually caused them to lead separate lives.

His philosophy classes intrigued him, and for a short while he considered becoming a professor instead of an actor-comedian. His time at college changed his life: “It changed what I believe and what I think about everything. I majored in philosophy. Something about non sequiturs appealed to me. In philosophy, I started studying logic, and they were talking about cause and effect, and you start to realize, ‘Hey, there is no cause and effect! There is no logic! There is no anything!’ Then it gets real easy to write this stuff, because all you have to do is twist everything hard—you twist the punch line, you twist the non sequitur so hard away from the things that set it up, that it’s easy . . . and it’s thrilling.” Martin periodically spoofed his philosophy studies in his 1970s stand-up act, comparing philosophy with studying geology. “If you’re studying geology, which is all facts, as soon as you get out of school you forget it all, but philosophy you remember just enough to screw you up for the rest of your life.”

In 1967, Martin transferred to UCLA and switched his major to theater. While attending college, he appeared in an episode of The Dating Game. Martin soon began working local clubs at night, to mixed notices. At age twenty-one, he dropped out of college.