Born in Tehran in 1919 to Habibollah Hoveyda (Ayn ol-Molk), a seasoned diplomat, most prominent during the latter years of the Qajar dynasty, and Afsar ol-Moluk, a descendent of the very royal family the senior Hoveyda would serve for much of his adult life. While Hoveyda's father had been a Bahá'í, he had left the religion and Hoveyda himself was not religious. He was the nephew of Abdol Hossein Sardari, also known as "Schindler of Iran". Because of the responsibilities borne by diplomats such as Ayn ol-Molk, the Hoveyda family was never fixed in one residence for any prolonged length of time. Studying in various countries gave Hoveyda a unique cosmopolitan flair that would remain being his most enduring characteristic. During the family's stay in Beirut, Lebanon, Hoveyda attended Lycée Français, an institution affiliated with the French government. His love for France and its culture are rooted in his tutelage at the lycée. French literary works by the likes of André Gide, André Malraux, Molière, and Baudelaire, captivated the young Hoveyda and gave way for his intellectual growth. Some pundits suggest that it was Hoveyda's intellectual prowess which initially attracted him into the Shah's folds.
Hoveyda's desire to attend a French university in 1938 made the young student jump the gun by entering the country of his dreams without completing specific high school prerequisites required for entry. Cited as being the main reason behind Hoveyda's organizational miscalculation was the possibility of military action by an ostensibly belligerent Nazi Germany. Any future occupation of the country would have hindered his chances of attending a French university. Stranded in France, Hoveyda decided to complete the required high school credits in London, England, a city that would come to depress the young man. Aside from completing his educational requisites, Hoveyda was able to sharpen his command of the English language. His ability to communicate in several languages, including Persian, French, English, Italian, German, and Arabic, helped him climb the political ladder later on in life. Hoveyda's return to France in 1939 would be short lived, nevertheless, due to a brewing diplomatic scuffle between the French government and Reza Shah Pahlavi. Having no choice but to leave France again, Hoveyda enrolled at the Universite Libre de Bruxelles in Brussels, Belgium, during the same year. His stay at the university would be markedly ephemeral because of the effects of the German Blitzkrieg which used Belgian territory as an entry route into France. After being displaced for a short time, Hoveyda was able to return to the Belgian university, obtaining a bachelor's degree in political science in 1941, under the ever-watchful eye of the occupying German administration.
Upon his return to Iran in 1942, Hoveyda rested for a few months before enlisting as a soldier in Iran's national army. His plan at the time was to use his experience as a conscript to supplement his seniority at the foreign ministry where he applied for employment prior to being drafted. Because of his higher education, Hoveyda was able to bypass boot camp and directly enter the Officer's Academy. Iran's modern Prime Ministers, until that point, were able to avoid military service, but Hoveida voluntarily chose to enlist. Although rooted in aristocracy himself, Hoveyda's decision is portentous in the sense that resources that were readily available for his predecessors were often scarce for the young government official.
The Foreign Ministry dispatched a message eight months later confirming Hoveyda's appointment. To some, the quick application process is evidence enough to suggest that there were influential forces that helped expedite Hoveyda's subsequent employment. These claims, however, are often based on hearsay rather than substantiated facts. During his time in the Ministry, Hoveyda befriended many elements of Iranian high society, including the likes of Sadeq Hedayat and Sadeq Chubak. His affinity for the country's intelligentsia is clearly observed in his earlier strategy as PM. By trying to consolidate the partnership between the monarchial regime and the intellectual opposition, Hoveyda believed that the incremental reforms he desired would bear fruit. Others like Jalal al-e Ahmad, writer and social and political critic, saw Hoveyda's ‘infiltration’ of Iran's intellectual ranks as a form of sycophancy. On the other hand, Hedayat and other eccentric characters were quick to identify and repel opportunists who were attempting to leech off their social status. Hedayat and others never distanced themselves from Hoveyda, symbolizing the latter's authenticity.
As Hoveyda garnered more experience, opportunities within Iran's governmental apparatus were becoming available to him. In August 1944, for instance, he accepted a position to accompany Zein ol-Abedin Rahnema, Iran's minister plenipotentiary, to France. Being an avid Francophile, Hoveyda would enjoy his time as an embassy official, but he would soon be entangled in an international scandal that would taint him for the rest of his life. The "Paris Story" recounts the illegal importation of financial assets, stored in Swiss banks during the war for security purposes, from Switzerland into the coffers of wealthy French businessmen in 1945. To avoid border taxes, diplomatic personnel were persuaded to act as the intermediary, simply because embassy vehicles were, by law, unable to be searched. Although Hoveida never had anything to do with the illegal transfers, his mere association with some of those indicted was enough for him to be used as a scapegoat in the affair.