Petrie was born on 3 June 1853 in Charlton, Kent, England, the son of William Petrie (1821–1908) and Anne (née Flinders) (1812–1892). Anne was the daughter of British Captain Matthew Flinders, who led the first circumnavigation of Australia (and whom Matthew was named after). William Petrie was an electrical engineer who developed carbon arc lighting and later developed chemical processes for Johnson, Matthey & Co.
Petrie was raised in a Christian household (his father being a member of the Plymouth Brethren), and was educated at home. He had no formal education. His father taught his son how to survey accurately, laying the foundation for his archaeological career. At the age of eight, he was tutored in French, Latin, and Greek, until he had a collapse and was taught at home. He also ventured his first archaeological opinion aged eight, when friends visiting the Petrie family were describing the unearthing of the Brading Roman Villa in the Isle of Wight. The boy was horrified to hear the rough shoveling out of the contents, and protested that the earth should be pared away, inch by inch, to see all that was in it and how it lay. "All that I have done since," he wrote when he was in his late seventies, "was there to begin with, so true it is that we can only develop what is born in the mind. I was already in archaeology by nature.