She was a daughter of Hanan Hashim and Sayyid Baha Uddin Toukan (or Touqan), former Jordanian ambassador to the Court of St James's (United Kingdom), Italy, Turkey and Egypt. Alia was born in Cairo, Egypt in December 1948. Her father was a Palestinian from Nablus, who had settled in Salt, near Amman. He served King Abdullah I, helped write the Jordanian Constitution, and was Jordan's first Ambassador to the United Nations.
She spent most of her childhood years travelling with her parents during her father's career in Jordan's diplomatic corps: she lived in Egypt, Turkey, London, the United States, and Rome. She attended Church School in London with her younger brothers, Alaa and Abdullah. She was educated at the Rome Center of Liberal Arts of Loyola University Chicago. She studied political science with a minor in social psychology, and public relations at Hunter College in New York. She was interested in sports and writing, and she wished to be a diplomat. In 1971, she moved to Jordan, where she worked for Royal Jordanian. She was asked by King Hussein bin Talal to oversee the preparations for the first International Water Skiing Festival held in Aqaba in September 1972.