DeVito was born at Raleigh Fitkin-Paul Morgan Memorial Hospital in Neptune Township, New Jersey, the son of Daniel DeVito Sr., a small business owner and Julia DeVito ( Moccello). He grew up in a family of five, with his parents and two older sisters. He is of Italo-Albanian descent; his family is originally from San Fele, Basilicata, as well as from the Arbëresh Albanian community of Calabria. He was raised in Asbury Park, New Jersey. He lived a few miles away from the original Jersey Mike's location and would eat there frequently, which would inspire him to become the sub shop's first celebrity spokesman in a line of commercials that began to air in September 2022.
DeVito was raised as a Catholic. When he was 14, he persuaded his father to send him to boarding school to "keep him out of trouble", and graduated from Oratory Preparatory School in Summit, New Jersey, in 1962. While working as a beautician at his sister's salon, his search for a professional makeup instructor led him to the American Academy of Dramatic Arts, where he graduated in 1966. In his early theater days, he performed with the Colonnades Theater Lab at the Eugene O'Neill Theater Center in Waterford, Connecticut. Along with his future wife Rhea Perlman, he appeared in plays produced by the Westbeth Playwrights Feminist Collective.