Key was born on March 22, 1971, in Southfield, Michigan, a suburb of Detroit. His father Leroy McDuffie, is African-American. His mother Carrie Herr, is of Polish and Flemish descent. He was adopted at a young age by a couple from Detroit, Michael Key and Patricia Walsh, who were both social workers. Like his birth parents, his adoptive parents were a black man and a white woman. Through his biological father, Key had two half-brothers, one of whom was comic book writer Dwayne McDuffie. Key discovered the existence of his half-siblings only after both had died.
Raised Catholic, Key attended the University of Detroit Mercy,a Catholic college, as an undergraduate, earning a Bachelor of Fine Arts degree in theater in 1993, followed by a Master of Fine Arts in theater at Pennsylvania State University in 1996. While at the University of Detroit Mercy, he was a member of Phi Kappa Theta.