William Daniels was born in Brooklyn, New York, to Irene and David Daniels, although in many of his roles he has spoken with a Boston Brahmin accent, with some transatlantic influence. His father was a bricklayer. He has two sisters, Jacqueline and Carol.
He was drafted into the U.S. Army in 1945 and stationed in Italy, where he served as a disc jockey at an Army radio station. At the suggestion of Howard Lindsay, co-author of Life With Father, who recommended he use the GI Bill to attend a college with a good drama department, he enrolled at Northwestern University. He graduated from Northwestern in 1949, and was a member of Sigma Nu fraternity.[