Capote rose above a childhood troubled by divorce, a long absence from his mother and multiple migrations. He discovered his calling by the age of eleven, and for the rest of his childhood he honed his writing ability. Capote began his professional career writing short stories. The critical success of one story, "Miriam" (1945), attracted the attention of Random House publisher Bennett Cerf, resulting in a contract to write Other Voices, Other Rooms (1948). Capote earned the most fame with In Cold Blood (1965), a journalistic work about the murder of a Kansas farm family in their home, a book Capote spent four years writing. A milestone in popular culture, it was the peak of his career, although it was not his final book. In the 1970s, he maintained his celebrity status by appearing on television talk shows.

Born Truman Streckfus Persons in New Orleans, Louisiana, the son of 17-year-old Lillie Mae Faulk and salesman Archulus Persons. His parents divorced when he was four, and he was sent to Monroeville, Alabama, where, for the following four to five years, he was raised by his mother's relatives. He formed a fast bond with his mother's distant relative, Nanny Rumbley Faulk, whom Truman called "Sook". "Her face is remarkable—not unlike Lincoln's, craggy like that, and tinted by sun and wind," is how Capote described Sook in "A Christmas Memory". In Monroeville, he was a neighbor and friend of author Harper Lee, who wrote the 1960 novel To Kill a Mockingbird, with the character Dill being based on Capote.

As a lonely child, Capote taught himself to read and write before he entered his first year of schooling. Capote was often seen at age five carrying his dictionary and notepad, and he began writing fiction at the age of eleven. He was given the nickname Bulldog around this age, possibly a phonetic reference and pun of "Bulldog Truman" to the fictional detective Bulldog Drummond popular in films of the mid-1930s.

On Saturdays, he made trips from Monroeville to the nearby city of Mobile on the Gulf Coast, and at one point he submitted a short story, Old Mrs. Busybody, to a children's writing contest sponsored by a newspaper, the Mobile Press Register. Capote received recognition for his early work from The Scholastic Art & Writing Awards in 1936.

In 1933, he moved to New York City to live with his mother and her second husband, Joseph Capote, a Cuban-born textile broker, who adopted him as his stepson and renamed him Truman García Capote. However, Joseph was convicted of embezzlement and shortly afterwards his income crashed and the family was forced to leave Park Avenue.

Of his early days, Capote related, "I began writing really sort of seriously when I was about 11. I say seriously in the sense that like other kids go home and practice the violin or the piano or whatever, I used to go home from school every day and I would write for about three hours. I was obsessed by it." In 1935, he attended the Trinity School in New York City. He then attended St. Joseph Military Academy. In 1939, the Capote family moved to Greenwich, Connecticut, and Truman attended Greenwich High School, where he wrote for both the school's literary journal, The Green Witch, and the school newspaper. When they returned to New York City in 1942, he graduated from the Dwight School, an Upper West Side private school where an award is now given annually in his name.

When he was 17, Capote's formal education ended when he was employed at The New Yorker magazine, which he held for two years. Years later, he reminisced, "Not a very grand job, for all it really involved was sorting cartoons and clipping newspapers. Still, I was fortunate to have it, especially since I was determined never to set a studious foot inside a college classroom. I felt that either one was or wasn't a writer, and no combination of professors could influence the outcome. I still think I was correct, at least in my own case."

Capote and his Monroeville neighbor, Harper Lee, remained lifelong friends. He based the character of Idabel in Other Voices, Other Rooms on her, and was in turn the inspiration for the character Dill in Lee's 1960 bestselling, Pulitzer prize-winning novel To Kill a Mockingbird. Capote once acknowledged this: "Mr. and Mrs. Lee, Harper Lee's mother and father, lived very near. Harper Lee was my best friend. Did you ever read her book, To Kill a Mockingbird? I'm a character in that book, which takes place in the same small town in Alabama where we lived. Her father was a lawyer and she and I used to go to trials all the time as children. We went to the trials instead of going to the movies." Like Capote, Dill is creative, bold, and suffers from an unsatisfactory family history. Later, Lee was his crucial partner in doing the investigations for In Cold Blood.

Between 1943 and 1946, Capote wrote a continual flow of short fiction, including "A Mink of One's Own," "Miriam," "My Side of the Matter," "Preacher's Legend," "Shut a Final Door" (for which he won the O. Henry Award at the age of 24) and "The Walls Are Cold." These stories were published in both literary quarterlies and well-known popular magazines, including The Atlantic Monthly, Harper's Bazaar, Harper's Magazine, Mademoiselle, The New Yorker, Prairie Schooner and Story. In June 1945, "Miriam" was published by Mademoiselle and went on to win a prize, Best First-Published Story, in 1946. In the spring of 1946, Capote was accepted at Yaddo, the 400-acre (1.6 km2) artists and writers colony at Saratoga Springs, New York.

Interviewed in 1957 for The Paris Review, Capote was asked about his short story technique, answering: