Julia Scarlett Elizabeth Louis-Dreyfus is born in New York City to Judith (née Bowles) and Gérard Louis-Dreyfus, chairman of Louis Dreyfus Energy Services. Her father was of French Jewish heritage, and her mother was of English descent. She is the great-great-granddaughter of Léopold Louis-Dreyfus, the founder of the Louis Dreyfus Group.

Julia's childhood was spent between New York City and various other locations due to her father's business ventures. She lived in France, Colombia, and other countries, exposing her to diverse cultures and experiences early on.

Julia's parents divorced when she was young. Her mother later remarried L. Thompson Bowles, a dean at the George Washington University Medical School.

Julia attended Sidwell Friends School in Washington, D.C., where she became involved in drama productions and developed her interest in performing arts. She developed her sense of humor and comedic timing at a young age.

Julia enrolled at Northwestern University in Evanston, Illinois, where she studied theatre. She became actively involved in the Mee-Ow Show, a student-run improv and sketch comedy troupe. She met future collaborators Brad Hall and Paul Barrosse here.

Julia dropped out of Northwestern University to pursue a career in comedy, just before graduating. She left to join 'Saturday Night Live'.