Zulfikar Ali Bhutto belonged to a Sindhi family, he was born to Sir Shah Nawaz Bhutto and Khursheed Begum (née Lakhi Bai) near Larkana. Zulfikar was their third child—their first one, Sikandar Ali, had died from pneumonia at age seven in 1914, and the second, Imdad Ali, died of cirrhosis at age 39 in 1953. His father was the dewan of the princely state of Junagadh, and enjoyed an influential relationship with the officials of the British Raj. As a young boy, Bhutto moved to Worli Seaface in Bombay to study at the Cathedral and John Connon School. He then also became an activist in the Pakistan Movement. In 1943, his marriage was arranged with Shireen Amir Begum. He later divorced her in 1945, however, in order to remarry. In 1947, Bhutto was admitted to the University of Southern California to study political science.
In 1949, as a sophomore, Bhutto transferred to the University of California, Berkeley, where he earned a B.A. (honours) degree in political science in 1950. There, Bhutto became interested in the theories of socialism, delivering a series of lectures on their feasibility in Islamic countries. During this time, Bhutto's father played a controversial role in the affairs of Junagadh. Coming to power in a palace coup, he secured the accession of his state to Pakistan, which was ultimately negated by Indian intervention in December 1947. In June 1950, Bhutto travelled to the United Kingdom to study law at Christ Church, Oxford and received an LLB, followed by an LLM degree in law and an M.Sc. (honours) degree in political science. Upon finishing his studies, he was called to the bar at Lincoln's Inn in 1953. He was fellow of Barrister Ijaz Hussain Batalvi who later appeared in his case as prosecutor.
Bhutto married his second wife, Nusrat Ispahani, an Iranian-Kurdish woman, in Karachi on 8 September 1951. Their first child, Benazir, was born in 1953. She was followed by Murtaza in 1954, Sanam in 1957 and Shahnawaz in 1958.