Winona Ryder was born Winona Laura Horowitz in Winona County, Minnesota, and was named after the city of Winona, Minnesota. She is the daughter of Cynthia (Istas), an author and video producer, and Michael Horowitz, a publisher and bookseller. Her father's family is Ukrainian Jewish and Romanian Jewish. She grew up in a ranch commune in Northern California which had no electricity. She is the goddaughter of Timothy Leary. Her parents were friends of Beat poet Allen Ginsberg and once edited a book called "Shaman Woman Mainline Lady", an anthology of writings on the drug experience in literature, which included one piece by Louisa May Alcott. Ryder would later play the lead role of Josephine March in the adaptation of this author's novel Little Women (1994).

Ryder moved with her parents to Petaluma, California when she was ten and enrolled in acting classes at the American Conservatory Theater. At age 13, she had a video audition to the film Desert Bloom (1986), but did not get the role. However, director David Seltzer spotted her and cast her in Lucas (1986). When telephoned to ask how she would like to have her name appear on the credits, she suggested Ryder as her father's Mitch Ryder & The Detroit Wheels album was playing the background. Ryder was selected for the role of Mary Corleone in The Godfather Part III (1990), but had to drop out of the role after catching the flu from the strain of doing the films Welcome Home, Roxy Carmichael (1990) and Mermaids (1990) back-to-back. She said she did not want to let everyone down by doing a substandard performance. She later made The Age of Innocence (1993), which was directed by Martin Scorsese, whom she believes to be "the best director in the world".