Barack Obama was born on August 4, 1961, in Honolulu, Hawaii, to Barack Obama, Sr., a black Kenyan of Nyang’oma Kogelo, Siaya District, Kenya, and Ann Dunham, a white American from Wichita, Kansas. His parents met while attending the University of Hawaii at Manoa, where his father was a foreign student. They separated when he was two years old and later divorced. Obama's father returned to Kenya and saw his son only once more before dying in an automobile accident in 1982. After her divorce, Dunham married Lolo Soetoro, and the family moved to Soetoro's home country of Indonesia in 1967, where Obama attended local schools in Jakarta until he was ten years old. He then returned to Honolulu to live with his maternal grandparents while attending Punahou School from the fifth grade in 1971 until his graduation from high school in 1979. Obama's mother returned to Hawaii in 1972 for several years and then back to Indonesia to complete fieldwork for her doctoral dissertation. She died of ovarian cancer in 1995. As an adult Obama admitted that during high school he used marijuana, cocaine, and alcohol, which he described at the 2008 Civil Forum on the Presidency as his greatest moral failure.

Following high school, Obama moved to Los Angeles, where he studied at Occidental College for two years. He then transferred to Columbia University in New York City, where he majored in political science with a specialization in international relations. Obama graduated with a B.A. from Columbia in 1983, then worked for a year at the Business International Corporation and then at the New York Public Interest Research Group.

After four years in New York City, Obama moved to Chicago, where he was hired as director of Developing Communities Project (DCP), a church-based community organization originally comprising eight Catholic parishes in Greater Roseland (Roseland, West Pullman, and Riverdale) on Chicago's far South Side, and worked there for three years from June 1985 to May 1988. During his three years as the DCP's director, its staff grew from one to thirteen and its annual budget grew from $70,000 to $400,000, with accomplishments including helping set up a job training program, a college preparatory tutoring program, and a tenants' rights organization in Altgeld Gardens. Obama also worked as a consultant and instructor for the Gamaliel Foundation, a community organizing institute. In mid-1988, he traveled for the first time to Europe for three weeks and then for five weeks in Kenya, where he met many of his Kenyan relatives for the first time.

Obama entered Harvard Law School in late 1988. At the end of his first year, he was selected, based on his grades and a writing competition, as an editor of the Harvard Law Review. In February 1990, in his second year, he was elected president of the Law Review, a full-time volunteer position functioning as editor-in-chief and supervising the Law Review's staff of eighty editors. Obama's election as the first black president of the Law Review was widely reported and followed by several long, detailed profiles. During his summers, he returned to Chicago where he worked as a summer associate at the law firms of Sidley & Austin in 1989 and Hopkins & Sutter in 1990. After graduating with a Juris Doctor (J.D.) magna cum laude from Harvard in 1991, he returned to Chicago.

The publicity from his election as the first black president of the Harvard Law Review led to a publishing contract and advance for a book about race relations. In an effort to recruit him to their faculty, the University of Chicago Law School provided Obama with a fellowship and an office to work on his book. He originally planned to finish the book in one year, but it took much longer as the book evolved into a personal memoir. In order to work without interruptions, Obama and his wife, Michelle, traveled to Bali where he wrote for several months. The manuscript was finally published in mid-1995 as Dreams from My Father.

Obama directed Illinois' Project Vote from April to October 1992, a voter registration drive with a staff of ten and seven hundred volunteers; it achieved its goal of registering 150,000 of 400,000 unregistered African-Americans in the state, and led to Crain's Chicago Business naming Obama to its 1993 list of "40 under Forty" powers to be.

Beginning in 1992, Obama taught constitutional law at the University of Chicago Law School for twelve years, being first classified as a Lecturer from 1992 to 1996, and then as a Senior Lecturer from 1996 to 2004.

He also, in 1993, joined Davis, Miner, Barnhill & Galland, a twelve attorney law firm specializing in civil rights litigation and neighborhood economic development, where he was an associate for three years from 1993 to 1996, then of counsel from 1996 to 2004, with his law license becoming inactive in 2002.

Obama was a founding member of the board of directors of Public Allies in 1992, resigning before his wife, Michelle, became the founding executive director of Public Allies Chicago in early 1993. He served from 1993 to 2002 on the board of directors of the Woods Fund of Chicago, which in 1985 had been the first foundation to fund Obama's DCP, and also from 1994 to 2002 on the board of directors of The Joyce Foundation. Obama served on the board of directors of the Chicago Annenberg Challenge from 1995–2002, as founding president and chairman of the board of directors from 1995–1999. He also served on the board of directors of the Chicago Lawyers' Committee for Civil Rights Under Law, the Center for Neighborhood Technology, and the Lugenia Burns Hope Center.

Obama was elected to the Illinois Senate in 1996, succeeding State Senator Alice Palmer as Senator from Illinois' 13th District, which then spanned Chicago South Side neighborhoods from Hyde Park-Kenwood south to South Shore and west to Chicago Lawn. Once elected, Obama gained bipartisan support for legislation reforming ethics and health care laws. He sponsored a law increasing tax credits for low-income workers, negotiated welfare reform, and promoted increased subsidies for childcare. In 2001, as co-chairman of the bipartisan Joint Committee on Administrative Rules, Obama supported Republican Governor Ryan's payday loan regulations and predatory mortgage lending regulations aimed at averting home foreclosures.

Obama was reelected to the Illinois Senate in 1998, and again in 2002. In 2000, he lost a Democratic primary run for the U.S. House of Representatives to four-term incumbent Bobby Rush by a margin of two to one.

In January 2003, Obama became chairman of the Illinois Senate's Health and Human Services Committee when Democrats, after a decade in the minority, regained a majority. He sponsored and led unanimous, bipartisan passage of legislation to monitor racial profiling by requiring police to record the race of drivers they detained and legislation making Illinois the first state to mandate videotaping of homicide interrogations. During his 2004 general election campaign for U.S. Senate, police representatives credited Obama for his active engagement with police organizations in enacting death penalty reforms. Obama resigned from the Illinois Senate in November 2004 following his election to the US Senate.

See also: United States Senate election in Illinois, 2004
In mid-2002, Obama began considering a run for the U.S. Senate; he enlisted political strategist David Axelrod that fall and formally announced his candidacy in January 2003. Decisions by Republican incumbent Peter Fitzgerald and his Democratic predecessor Carol Moseley Braun not to contest the race launched wide-open Democratic and Republican primary contests involving fifteen candidates. Obama's candidacy was boosted by Axelrod's advertising campaign featuring images of the late Chicago Mayor Harold Washington and an endorsement by the daughter of the late Paul Simon, former U.S. Senator for Illinois. He received over 52% of the vote in the March 2004 primary, emerging 29% ahead of his nearest Democratic rival.

Obama's expected opponent in the general election, Republican primary winner Jack Ryan, withdrew from the race in June 2004.

In July 2004, Obama wrote and delivered the keynote address at the 2004 Democratic National Convention in Boston, Massachusetts. After describing his maternal grandfather's experiences as a World War II veteran and a beneficiary of the New Deal's FHA and G.I. Bill programs, Obama spoke about changing the U.S. government's economic and social priorities. He questioned the Bush administration's management of the Iraq War and highlighted America's obligations to its soldiers. Drawing examples from U.S. history, he criticized heavily partisan views of the electorate and asked Americans to find unity in diversity, saying, "There is not a liberal America and a conservative America; there's the United States of America." Broadcasts of the speech by major news organizations launched Obama's status as a national political figure and boosted his campaign for U.S. Senate.

In August 2004, two months after Ryan's withdrawal and less than three months before Election Day, Alan Keyes accepted the Illinois Republican Party's nomination to replace Ryan. A long-time resident of Maryland, Keyes established legal residency in Illinois with the nomination. In the November 2004 general election, Obama received 70% of the vote to Keyes's 27%, the largest victory margin for a statewide race in Illinois history.