Joel Daniel Coen was born on November 29, 1954, in St. Louis Park, Minnesota, a suburb of Minneapolis. His brother Ethan was born almost three years later, on September 21, 1957. Their mother, Rena (née Neumann; 1925–2001), was an art historian at St. Cloud State University, and their father, Edward Coen (1919–2012), was a professor of economics at the University of Minnesota. The brothers have an older sister, Deborah, who is a psychiatrist in Israel.
Both sides of the Coen family were Eastern European Ashkenazi Jews. Their paternal grandfather, Victor Coen, was a barrister in the Inns of Court in London before retiring to Hove with their grandmother. Edward Coen was an American citizen born in the United States, but grew up in Croydon, London and studied at the London School of Economics. Afterwards he moved to the United States, where he met the Coens' mother, and served in the United States Army during World War II.
The Coens developed an early interest in cinema through television. They grew up watching Italian films (ranging from the works of Federico Fellini to the Sons of Hercules films) aired on a Minneapolis station, the Tarzan films, and comedies (Jerry Lewis, Bob Hope and Doris Day).
In the mid-1960s, Joel saved money from mowing lawns to buy a Vivitar Super 8 camera. Together, the brothers remade movies they saw on television, with their neighborhood friend Mark Zimering ("Zeimers") as the star. Cornel Wilde's The Naked Prey (1965) became their Zeimers in Zambezi, which featured Ethan as a native with a spear. Lassie Come Home (1943) was reinterpreted as their Ed... A Dog, with Ethan playing the mother role in his sister's tutu. They also made original films like Henry Kissinger, Man on the Go, Lumberjacks of the North and The Banana Film.
Joel graduated from St. Louis Park High School in 1973, and from Bard College at Simon's Rock in Great Barrington, Massachusetts. After Simon's Rock, Joel spent four years in the undergraduate film program at New York University, where he made a 30-minute thesis film, Soundings. In 1979, he briefly enrolled in the graduate film program at the University of Texas at Austin, following a woman he had married who was in the graduate linguistics program. The marriage soon ended in divorce and Joel left UT Austin after nine months.