Virginia Woolf was born Adeline Virginia Stephen in London in 1882. Her mother, a renowned beauty, Julia Prinsep Stephen (born Jackson) (1846—1895), was born in India to Dr. John and Maria Pattle Jackson and later moved to England with her mother, where she served as a model for Pre-Raphaelite painters such as Edward Burne-Jones. Her father, Sir Leslie Stephen, was a notable historian, author, critic and mountaineer. The young Virginia was educated by her parents in their literate and well-connected household at 22 Hyde Park Gate, Kensington. Her parents had each been married previously and been widowed, and, consequently, the household contained the children of three marriages. Julia had three children from her first husband, Herbert Duckworth: George Duckworth, Stella Duckworth, and Gerald Duckworth. Her father was married to Minny Thackeray, and they had one daughter: Laura Makepeace Stephen, who was declared mentally disabled and lived with the family until she was institutionalized in 1891. Leslie and Julia had four children together: Vanessa Stephen (1879), Thoby Stephen (1880), Virginia (1882), and Adrian Stephen (1883).

Sir Leslie Stephen's eminence as an editor, critic, and biographer, and his connection to William Thackeray (he was the widower of Thackeray's youngest daughter), meant that his children were raised in an environment filled with the influences of Victorian literary society. Henry James, George Henry Lewes, Julia Margaret Cameron (an aunt of Julia Stephen), and James Russell Lowell, who was made Virginia's honorary godfather, were among the visitors to the house. Julia Stephen was equally well connected. Descended from an attendant of Marie Antoinette, she came from a family of renowned beauties who left their mark on Victorian society as models for Pre-Raphaelite artists and early photographers. Supplementing these influences was the immense library at the Stephens' house, from which Virginia and Vanessa (unlike their brothers, who were formally educated) were taught the classics and English literature.

According to Woolf's memoirs, her most vivid childhood memories, however, were not of London but of St. Ives in Cornwall, where the family spent every summer until 1895. The Stephens' summer home, Talland House, looked out over Porthminster Bay, and is still standing today, though somewhat altered. Memories of these family holidays and impressions of the landscape, especially the Godrevy Lighthouse, informed the fiction Woolf wrote in later years, most notably To the Lighthouse.

The sudden death of her mother in 1895, when Virginia was 13, and that of her half-sister Stella two years later, led to the first of Virginia's several nervous breakdowns. She was, however, able to take courses of study (some at degree level) in Greek, Latin, German and history at the Ladies’ Department of King’s College London between 1897 and 1901, and this brought her into contact with some of the early reformers of women’s higher education such as Clara Pater, George Warr and Lilian Faithfull (Principal of the King’s Ladies’ Department). Her sister Vanessa also studied Latin, Italian, art and architecture at King’s Ladies’ Department.

The death of her father in 1904 provoked her most alarming collapse and she was briefly institutionalized. Her breakdowns and subsequent recurring depressive periods, modern scholars (including her nephew and biographer, Quentin Bell) have suggested, were also influenced by the sexual abuse she and Vanessa were subjected to by their half-brothers George and Gerald Duckworth (which Woolf recalls in her autobiographical essays A Sketch of the Past and 22 Hyde Park Gate).

Throughout her life, Woolf was plagued by periodic mood swings and associated illnesses. Though this instability often affected her social life, her literary productivity continued with few breaks until her suicide.

After the death of their father and Virginia's second nervous breakdown, Vanessa and Adrian sold 22 Hyde Park Gate and bought a house at 46 Gordon Square in Bloomsbury.