Iñárritu was born on 15 August 1963 in Mexico City, the youngest of seven siblings, to Luz María Iñárritu and Héctor González Gama. His maternal grandfather, Alfredo Iñárritu y Ramírez de Aguilar, was a prominent lawyer, judge, and justice of the Supreme Court of Mexico with partial Basque origins. Héctor was a banker who owned a ranch, but went bankrupt when Iñárritu was five. A poor student, Iñárritu was expelled from high school at the age of 16 or 17 due to poor grades and misbehavior. He briefly ran off with a girl from a wealthy family to Acapulco, having been influenced by the Miloš Forman film Hair, but returned to Mexico City after a week.
Soon after, Iñárritu left home and worked as a sailor on cargo boats, taking two trips at the ages of 16 and 18, sailing through the Mississippi River and then visiting Europe and Africa. With $1,000 supplied by his father, Iñárritu stayed in Europe for a year on the second trip. He has noted that these early travels as a young man have had a great influence on him as a filmmaker, and the settings of his films have often been in the places he visited during this period. After his travels, Iñárritu returned to Mexico City and majored in communications at Universidad Iberoamericana.