Melanie Jayne Lynskey was born in New Plymouth, New Zealand, to Kay Lynskey, a former nurse, and Tim Lynskey, an orthopedic surgeon. She is the eldest of five children.

Melanie spent her early childhood in New Plymouth before moving to Wellington. This period of her life was marked by a close-knit family environment and an appreciation for the arts, fostering her early interest in performance.

Melanie attended Fitzherbert Street School in Palmerston North.

Lynskey attended New Plymouth Girls' High School. It was during this time that she became actively involved in school drama productions and developed her acting skills. Her participation in school plays laid the foundation for her professional acting career.