Francis was a son of Emperor Leopold II (1747–1792) and his wife Maria Luisa of Spain (1745–1792), daughter of Charles III of Spain. Francis was born in Florence, the capital of Tuscany, where his father reigned as Grand Duke from 1765–90. Though he had a happy childhood surrounded by his many siblings, his family knew Francis was likely to be a future Emperor (his uncle Joseph had no surviving issue from either of his two marriages), and so in 1784 the young Archduke was sent to the Imperial Court in Vienna to educate and prepare him for his future role.
Emperor Joseph II himself took charge of Francis's development. His disciplinarian regime was a stark contrast to the indulgent Florentine Court of Leopold. The Emperor wrote that Francis was "stunted in growth", "backward in bodily dexterity and deportment", and "neither more nor less than a spoiled mother's child". Joseph concluded that "the manner in which he was treated for upwards of sixteen years could not but have confirmed him in the delusion that the preservation of his own person was the only thing of importance".
Joseph's martinet method of improving the young Francis were "fear and unpleasantness". The young Archduke was isolated, the reasoning being that this would make him more self-sufficient as it was felt by Joseph that Francis "failed to lead himself, to do his own thinking". Nonetheless, Francis greatly admired his uncle, if rather feared him. To complete his training, Francis was sent to join an army regiment in Hungary and he settled easily into the routine of military life.
After the death of Joseph II in 1790, Francis's father became Emperor. He had an early taste of power while acting as Leopold's deputy in Vienna while the incoming Emperor traversed the Empire attempting to win back those alienated by his brother's policies. The strain told on Leopold and by the winter of 1791, he became ill. He gradually worsened throughout early 1792; on the afternoon of 1 March Leopold died, at the relatively young age of 44. Francis, just past his 24th birthday, was now Emperor, much sooner than he had expected.