Jamesetta Hawkins was born on January 25, 1938, in Los Angeles, California, to Dorothy Hawkins, who was 14 at the time. Although her father has never been identified, James speculated that she was the daughter of pool player Rudolf "Minnesota Fats" Wanderone, whom she met briefly in 1987. Her mother was frequently absent from their apartment in Watts, conducting relationships with various men, and James lived with a series of foster parents, most notably "Sarge" and "Mama" Lu. James referred to her mother as "the Mystery Lady". James was raised by relatives and friends during her childhood, and she began regularly attending a Baptist church while in the care of her grandparents.
James received her first professional vocal training at the age of five from James Earle Hines, musical director of the Echoes of Eden choir at the St. Paul Baptist Church in South-Central Los Angeles. She became a soloist in the choir despite her young age and performed with them on local radio stations. She quickly gained attention for having a strong voice for a child. Hines often punched her in the chest while she sang to force her voice to come from her gut.
Sarge, like Hines, was also abusive. During drunken poker games at home, he would awaken James in the early morning hours and force her with beatings to sing for his friends. The trauma of her foster father forcing her to sing under these humiliating circumstances caused her to have difficulties with singing on demand throughout her career.
In 1950, Mama Lu died, and James's biological mother took her to the Fillmore district of San Francisco. Within a couple of years, she began listening to doo-wop and was inspired to form a girl group, the Creolettes (so named for the members' light-skinned complexions).
At the age of 14, she met musician Johnny Otis. Stories on how they met vary. In Otis's version, she came to his hotel after one of his performances in the city and persuaded him to audition her. Another story was that Otis spotted the Creolettes performing at a Los Angeles nightclub and sought for them to record his "answer song" to Hank Ballard's "Work with Me, Annie". Otis took the Creolettes under his wing and helped them sign to Modern Records, at which point they changed their name to Peaches. At this time Otis also gave James her stage name, transposing "Jamesetta" (her given first name) into "Etta James." In 1954, James recorded and was credited as co-author for "The Wallflower" (a title change to the aforementioned song, "Work with Me, Annie"), which was released in early 1955. The original title of the song was actually "Roll with Me, Henry", but it had been changed to avoid censorship at the time (roll implying sexual activity). In February 1955, the song reached number one on the Hot Rhythm & Blues Tracks chart. Its success also gave the Peaches an opening spot on Little Richard's national tour.
While James was on tour with Richard, pop singer Georgia Gibbs recorded a version of her song and released it under the again-altered title "Dance With Me, Henry." It became a crossover hit, reaching number one on the Billboard Hot 100, which angered James.
After leaving the Peaches, James had another R&B hit with "Good Rockin' Daddy" but struggled with follow-ups. When her contract with Modern came up for renewal in 1960, she signed a contract with Chess Records instead, with which she would go on to become one of the label's earliest stars. Around this time, she became involved in a relationship with the singer Harvey Fuqua, the founder of the doo-wop group the Moonglows.
Musician Bobby Murray toured with James for over 20 years. He wrote that James had her first hit single when she was 15 years old and went steady with B.B. King when she was 16. James believed that King's hit single "Sweet Sixteen" was about her. In early 1955, she and an aspiring singer, the 19-year-old Elvis Presley, then recording for Sun Studios and an avid fan of King's, shared a bill in a large club just outside Memphis. In her autobiography, she noted how impressed she was with the young singer's manners. She also recalled how happy he made her many years later when she found out that it was Presley who had moved her close friend Jackie Wilson from a substandard convalescent home to a more appropriate facility and, as she put it, paid all the expenses. Presley died a year later. Wilson went on to live for another ten years in the care center Presley found for him.