Mankiewicz was born in Wilkes-Barre, Pennsylvania, to Franz Mankiewicz (died 1941) and Johanna Blumenau, Jewish emigrants from Germany and Courland, respectively. Besides his older sister, Erna Mankiewicz Stenbuck (1901–1979), he had an older brother, Herman J. Mankiewicz (1897–1953), who brought him to Hollywood to become a screenwriter. Herman also won an Oscar for co-writing Citizen Kane (1941).
At age four, Mankiewicz moved with his family to New York City, graduating in 1924 from Stuyvesant High School. He followed his brother to Columbia University, where he majored in English and wrote for the Columbia Daily Spectator, and after he graduated in 1928, he moved to Berlin, where he worked at several jobs, including translating film intertitles from German to English for UFA.