Davis was born in Toronto General Hospital, Toronto, Ontario, the son of Vera (Hewetson) and Albert Grenville Davis. His father was a successful local lawyer. He married twice, first to Helen MacPhee (b. 1931, m. 1955, d. 1962), with whom he had four children (Neil, Nancy, Cathy, Ian), before marrying Kathleen MacKay (m. 1962).
Davis was politically active from a young age. Local Progressive Conservative Member of Parliament (MP) Gordon Graydon was a frequent guest at his parents' house, and Davis himself became the first delegate younger than seventeen years to attend a national Progressive Conservative convention in Canada. He frequently campaigned for local Member of Provincial Parliament (MPP) Thomas Laird Kennedy, who briefly served as Premier of Ontario in 1949.
He graduated from the University of Toronto in 1951 and attended Osgoode Hall Law School. Davis was a football player during his university years, and his teammates included Roy McMurtry and Thomas Leonard Wells, both of whom would later serve in his cabinet.
Davis was first elected to the Legislative Assembly of Ontario in the 1959 provincial election, for the southern Ontario constituency of Peel. He was only 29 years old. Although Peel was an extremely safe Conservative seat for most of its history, Davis won by a narrow 1,203 votes. The election took place soon after the federal Progressive Conservative government of John Diefenbaker had cancelled the Avro Arrow program. Most of the 14,000 Canadians put out of work by this decision were residents of Peel, and many cast protest ballots against Diefenbaker by supporting Bill Brydon, the provincial Liberal candidate. Davis served for two years as a backbench supporter of Leslie Frost's government. When Frost announced his retirement in 1961, Davis became the chief organizer of Robert Macaulay's campaign to succeed him as premier and party leader. Macaulay was eliminated on the next-to-last ballot, and, with Davis, delivered crucial support for John Robarts to defeat Kelso Roberts on the final vote.