The ninth of ten children, Shalhoub was born and raised in a Lebanese Christian household in Green Bay, Wisconsin. The family lived on Doty Street, and Shalhoub's mother kept the large family harmonious despite the chaos. Shalhoub described his mother as "funny and nutty" and said she would not allow Shalhoub and his siblings to express anger. Shalhoub attributed his therapy as an adult to that emotional restriction but has stated that it enabled him to play calm and relaxed roles in his career.
His father, Joseph, was from Zahle, Lebanon while it was still part of the Ottoman Empire and immigrated to the United States as a child after his own parents, Milhem and Mariam, died during World War I. After immigrating to America, Joseph became a meat peddler who drove a refrigerated truck.
Joseph married Shalhoub's mother, Helen Seroogy, a Lebanese American. The two met when Joseph was taken in to be raised by her family, when both were young. The Seroogy family operated a candy store that remains a family business. One of Shalhoub's maternal great-great-grandfathers, Abdul Naimy, although Lebanese, was reportedly killed by being crucified in 1895 during the Hamidian massacres committed against Christian Armenians in the Ottoman Empire.
Shalhoub was introduced to acting by an older sister, who put his name forward to be an extra in a high-school production of The King and I. After graduating from Green Bay East High School, he spent a short time at the University of Wisconsin–Green Bay before participating in the National Student Exchange to the University of Southern Maine where he later transferred and earned a bachelor's degree. He later went on to earn a master's degree from the Yale School of Drama in 1980.
