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Khalifa was born on September 8, 1987 in Minot, North Dakota, to a mother and a father serving in the military. His parents divorced when Khalifa was about three years old. His parents' military service caused him to move regularly: Khalifa lived in Germany, England, and Japan before settling in Pittsburgh where he attended Taylor Allderdice High School.

His stage name is derived from khalifa, an Arabic word meaning "successor", and wisdom, which was shortened to Wiz when Khalifa was fifteen. Khalifa stated to spinner.com that the name also came from being called "young Wiz 'cause I was good at everything I did, and my granddad is Muslim, so he gave me that name; he felt like that's what I was doing with my music." He got his stage name tattooed on his 17th birthday. He includes Camp Lo, The Notorious B.I.G. and Bone Thugs-n-Harmony among his influences.

Khalifa parted ways with Warner Bros. Records in July 2009 after numerous delays in releasing his planned debut album for the label, First Flight. Khalifa stated to the Pittsburgh Post-Gazette that, "I learned a lot during my time there and matured as an artist during the process. I'm happy to be moving on with all of my material and having the chance to be in control of my next moves". Khalifa appeared with Girl Talk, Modey Lemon, Donora, Grand Buffet, and Don Caballero at the Amphitheatre at Station Square in Pittsburgh on July 31, 2009, where he announced that his relationship with Warner Bros. was over.

Citing music industry insiders, New York magazine wrote that Khalifa signed with Atlantic Records in April 2010, although the rapper did not confirm it. He stated to AllHipHop in June 2010 that he was working on a new album, but was weighing his options and had not yet decided on a label to distribute it. Khalifa confirmed to MTV on July 30 that he was signing an Atlantic Records deal.