Laurence Paul Fox was born in Leeds on 26 May 1978, the son of Mary Elizabeth Piper and actor James Fox. His paternal grandfather was talent agent Robin Fox and his paternal grandmother was actress Angela Worthington, whose father was playwright Frederick Lonsdale. He has two older brothers named Tom and Robin, a younger sister named Lydia, and a younger brother named Jack. Robin is a film producer, while Lydia and Jack are actors; Lydia is married to comedian and filmmaker Richard Ayoade. Fox's uncles are actor Edward Fox and producer Robert Fox. He is also the cousin of actors Emilia and Freddie Fox, the children of his uncle Edward.
Fox was raised as an evangelical Christian. At the age of 13, he was enrolled at Harrow School. He was expelled a few weeks before taking his A-Level exams, and was unable to obtain a place at any university due to a report about him from Harrow.
After working as a gardener and in an office, he decided to follow his family into acting, and successfully auditioned for the Royal Academy of Dramatic Art (RADA). During his time there, he appeared in numerous student productions, including the lead roles of Gregers Werle in Ibsen's The Wild Duck, Marcus Andronicus in Titus Andronicus, and Stephen Daedalus in an adaptation of James Joyce's novel Ulysses. He graduated in 2001.