Swank was born on July 30, 1974, in Lincoln, Nebraska. Her mother, Judy Kay (née Clough), was a secretary and dancer, and her father, Stephen Michael Swank, was a Chief Master Sergeant in the Oregon Air National Guard and later a traveling salesman. Many of Swank's family members are from Ringgold County, Iowa. Her maternal grandmother, Frances Martha Clough (née Domínguez), was born in El Centro, California, and was of Mexican descent. Swank's paternal grandmother was born in England; her other ancestry includes Dutch, German, Ulster-Scots, Scottish, Swiss, and Welsh. The surname "Swank", originally "Schwenk", is of German origin. She identifies as having Shoshone and Spanish ancestry through her maternal grandmother.
After living in Spokane, Washington, Swank's family moved into a home near Lake Samish, near Bellingham, Washington, when Swank was six. She attended Happy Valley Elementary School, Fairhaven Middle School, then Sehome High School in Bellingham until she was 16. She competed in the Junior Olympics, the Washington state championships in swimming, and ranked fifth in the state in all-around gymnastics. Swank made her first appearance on stage when she was nine years old, starring in The Jungle Book.
When Swank was 15, her parents separated, and her mother, supportive of her daughter's desire to act, moved with her to Los Angeles, where they lived in their car until her mother saved enough money to rent an apartment. Swank has called her mother the inspiration for her acting career and her life. In California, Swank enrolled in South Pasadena High School, later dropping out. She described her time at that school: "I felt like such an outsider. I didn't feel like I fit in. I didn't belong in any way. I didn't even feel like the teachers wanted me there. I just felt like I wasn't seen or understood." She explained that she became an actor because she felt like an outsider, "As a kid I felt that I belonged only when I read a book or saw a movie, and could get involved with a character. It was natural that I became an actor because I longed so much to be those other people, or at least to play them."
