Shahid Kapoor was born on 25 February 1981 to actor Pankaj Kapur and actor-dancer Neelima Azeem.[1] Kapoor's parents divorced when he was three years old; his father shifted to Bombay (and married the actress Supriya Pathak) and Kapoor lived in Delhi with his mother and maternal grandparents.[2][3] His grandparents were journalists for a Russian magazine, and Kapoor was particularly fond of his grandfather: "He would walk me to school every single day. He would talk to me about dad, with whom he shared a great relationship, and read out his letters to me."[2] His father, who was then a struggling actor in Mumbai, would visit Kapoor in Delhi once a year on his birthday.[2] When Kapoor was 10, his mother, who was working as a dancer, moved to Mumbai to work as an actress.[2]

In Mumbai, Azeem went on to marry the actor Rajesh Khattar.[3] Kapoor continued living with his mother and Khattar, until they separated in 2001.[3] Kapoor continues to use the last name Khattar on his passport.[4] He has a maternal half-brother from his mother's marriage to Khattar.[3] From his father's marriage to Pathak, he has two paternal half-siblings.[5] Kapoor was educated at the Gyan Bharati School in Delhi and Rajhans Vidyalaya in Mumbai.[6] He later attended Mumbai's Mithibai College for three years.[7]

Kapoor was interested in dance from an early age, and at the age of 15, he joined Shiamak Davar's dance institute.[8] As a student there, Kapoor appeared as a background dancer in the films Dil To Pagal Hai (1997) and Taal (1999), in which Davar served as choreographer.[8] During a stage show at the institute, Kapoor performed in the songs "Vogue" and "GoldenEye" to a rapturous response from the audience; Kapoor described that moment to be the first time he "felt like a star".[8] He later became an instructor at the institute.[8] During this time, Kapoor accompanied a friend to an audition for a Pepsi commercial featuring the stars Shah Rukh Khan, Kajol and Rani Mukerji, but went on to get the part himself.[2] He subsequently appeared in other television commercials, and also featured in music videos for several performers, including the band Aryans and the singer Kumar Sanu.[9] Kapoor also worked as an assistant director in his father's television series Mohandas B.A.L.L.B (1998)