Chappelle was born in Jacksonville, Florida, the son of Lewis Chappelle and his wife Anna, who had been slaves in Newberry County, South Carolina. After slavery was abolished, they left South Carolina with their relatives and other freed slaves to help construct the suburban neighborhood of LaVilla in Jacksonville, which became a center of African-American culture in Florida. Lewis Chappelle and his brother Mitchell Chappelle worked on house construction and also held several political positions in LaVilla. Their other brother Julius Caesar Chappelle, Pat's uncle, also worked in construction in LaVilla and then moved to Boston, Massachusetts, where he became a legislator between 1883 and 1886, one of the early black Republicans in Boston (the Republican Party was founded by abolitionists).
Pat Chappelle was musically gifted. He and his brothers and cousin learned musical skills from some of their relatives – Pat learned how to play the guitar and piano, but was best known for his proficiency in banjo. He left school after the fourth grade and played guitar in traveling string bands. He started playing in hotels on the East Coast and was discovered by a prestigious vaudeville circuit owner, Benjamin Franklin Keith, who offered him bookings with the Museum circuit in Boston and New York City. Later, he performed in Florida restaurants and saloons.
In 1898, Chappelle returned to Jacksonville and organised his first traveling show, the Imperial Colored Minstrels (or Famous Imperial Minstrels), which featured comedian Arthur "Happy" Howe and toured successfully around the South. Early shows also featured ragtime pianist Prof. Fred Sulis, and white country music fiddler Blind Joe Mangrum (who went on to record for Victor Records as late as 1928). Chappelle also opened a pool hall in the commercial district of Jacksonville. Remodeled as the Excelsior Hall, it became the first black-owned theater in the South, reportedly seated 500 people, and also sold whiskey. In an August 20, 1898 article in The New York Times, it was stated that Chappelle, who was standing outside the saloon in Jacksonville, was "almost beaten to death" by an angry mob who blamed him as the proprietor for a dosing of soldiers inside the saloon with "knockout drops" by unknowns that caused some of the men to appear "completely insensible, seemingly lifeless" and left other "almost screaming with pain and writhing in convulsions." Pat Chappelle's life was saved by "Major Harrison, Provost Marshall, in ordering out a reserve guard." The article also reported that Chappelle "was terribly beaten and kicked."
In 1899, following a dispute with the white landlord of the Excelsior Hall, J. E. T. Bowden, who was also the Mayor of Jacksonville, Chappelle closed the theatre and stripped out its tiled floor and fixtures. He moved to Tampa, where he – with fellow African-American entrepreneur R. S. Donaldson – opened a new vaudeville house, the Buckingham, in the Fort Brooke neighborhood, using the Excelsior's fittings. The Tampa Morning Tribune reported that "he mayor of Jacksonville is therefore after Chappell , and there may develop an interesting local end to the story." Chappelle claimed that he owned the fittings, but eventually they were returned to Jacksonville and the charges against him were dropped. The Buckingham Theatre's Saloon opened in September 1899, and within a few months was reported to be "crowded to the doors every night with Cubans, Spaniards, Negroes and white people". In December 1899 Chappelle and Donaldson opened a second theatre, the Mascotte, closer to the center of Tampa.
In 1901, the Buckingham Theatre Saloon was advertised as offering fine imported wine, liquors, beer, and cigars, and when the theater was renovated, it had its grand opening on December 23, 1901, that made the next day's front page of the Morning Tribune in Tampa. The Theatre Saloon bought its fine Cuban cigars from a factory owned by Vicente Martinez Ybor in Ybor City. In 1903, while Pat was traveling with his Rabbit's Foot Company, he left his brother Louis in charge of the Buckingham Theatre Saloon. Louis was arrested and convicted of selling liquor without a license, and the Buckingham Theatre Saloon was closed. Pat Chappelle left his vaudeville company and rushed to Tampa to hire a lawyer who was able to gain pardon and release for Louis. Chappelle was fined, although the circumstances of the charge against him were deemed suspicious and the publicity did not seem to tarnish their reputations. In 1904, the Buckingham Theatre Saloon changed its name and reopened as the Red Fox Music Hall with a pool hall and fancy café with the additional marketing help of a cousin, Mitchell Chappelle, who also helped secure liquor licenses and license renewals to be in compliance with regulations.