Mishima was born in the Yotsuya district of Tokyo (now part of Shinjuku). His father was Azusa Hiraoka, a government official, and his mother, Shizue, was the daughter of a school principal in Tokyo. His paternal grandparents were Jotarō and Natsuko Hiraoka. He had a younger sister named Mitsuko, who died of typhus, and a younger brother named Chiyuki.

Mishima's early childhood was dominated by the shadow of his grandmother, Natsu, who took the boy and separated him from his immediate family for several years. Natsu was the illegitimate granddaughter of Matsudaira Yoritaka, the daimyo of Shishido in Hitachi Province, and had been raised in the household of Prince Arisugawa Taruhito; she maintained considerable aristocratic pretensions even after marrying Mishima's grandfather, a bureaucrat who had made his fortune in the newly opened colonial frontier and who rose to become Governor-General of Karafuto. She was also prone to violence and morbid outbursts, which are occasionally alluded to in Mishima's works. It is to Natsu that some biographers have traced Mishima's fascination with death. Natsu did not allow Mishima to venture into the sunlight, to engage in any kind of sport or to play with other boys; he spent much of his time alone or with female cousins and their dolls.

Mishima returned to his immediate family at 12. His father, a man with a taste for military discipline, employed such tactics as holding the young boy up to the side of a speeding train; he also raided Mishima's room for evidence of an "effeminate" interest in literature and often ripped up the boy's manuscripts.

At age six, Mishima enrolled in elite Peers School (Gakushuin 学習院). At 12, Mishima began to write his first stories. He read voraciously the works of Oscar Wilde, Rainer Maria Rilke and numerous classic Japanese authors. After six years at school, he became the youngest member of the editorial board in its literary society. Mishima was attracted to the works of Tachihara Michizō, which in turn created an appreciation for the classical form of the waka. Mishima's first published works included waka poetry, before he turned his attention to prose.

He was invited to write a prose short story for the Peers' School literary magazine and submitted Hanazakari no Mori (花ざかりの森 The Forest in Full Bloom), a story in which the narrator describes the feeling that his ancestors somehow still live within him. Mishima’s teachers were so impressed with the work that they recommended it for the prestigious literary magazine, Bungei-Bunka (文芸文化 Literary Culture). The story, which makes use of the metaphors and aphorisms which later became his trademarks, was published in book form in 1944, albeit in a limited fashion (4,000 copies) because of the wartime shortage of paper. In order to protect him from a possible backlash from his schoolmates, his teachers coined the pen-name "Yukio Mishima".

Mishima's story Tabako (煙草 The Cigarette), published in 1946, describes some of the scorn and bullying he faced at school when he later confessed to members of the school's rugby union club that he belonged to the literary society. This trauma also provided material for the later story Shi o Kaku Shōnen (詩を書く少年 The Boy Who Wrote Poetry) in 1954.

Mishima received a draft notice for the Imperial Japanese Army during World War II. At the time of his medical check up, he had a cold and spontaneously lied to the army doctor about having symptoms of tuberculosis and thus was declared unfit for service.

Although his father had forbidden him to write any further stories, Mishima continued to write secretly every night, supported and protected by his mother, who was always the first to read a new story. Attending lectures during the day and writing at night, Mishima graduated from the University of Tokyo in 1947. He obtained a position as an official in the government's Finance Ministry and was set up for a promising career.

However, Mishima had exhausted himself so much that his father agreed to his resigning from his position during his first year in order to devote his time to writing.

Mishima was a disciplined and versatile writer. He wrote not only novels, popular serial novellas, short stories and literary essays, but also highly acclaimed plays for the Kabuki theater and modern versions of traditional Noh drama.