Kidd was born in San Francisco, California, the oldest of three children of Steve and Anne Kidd. His father, now deceased, was African-American and his mother is Irish American. He was raised in Oakland Hills, an upper middle class section of Oakland. He attended St. Paschal's Baylon school in Oakland Hills. He frequented the city courts of Oakland, where he often found himself pitted against future NBA All-Star Gary Payton. The two still reminisce about the playing days of their youth. During his youth, Kidd also excelled at soccer as well as other sports.

At St. Joseph Notre Dame High School in Alameda, California, under the guidance of legendary prep coach Frank LaPorte, Kidd led the Pilots to back-to-back state championships, averaging 25.0 points, 10.0 assists, 7.0 rebounds and 7.0 steals his senior season. During that year, he also received a host of individual honors, including the Naismith Award as the nation's top high school player, and was named Player of the Year by PARADE and USA Today. The all-time prep leader in assists (1,155) and the state’s seventh-best career scorer (2,661 points), Kidd was voted California Player of the Year for the second time and also a McDonald's All-American.

After a highly publicized recruiting process, Kidd shocked many fans and pundits alike by choosing to attend the University of California, Berkeley -- a school that was coming off a 10-18 season and hadn’t won a Pac-10 title since 1959 -- over a slew of top-ranked collegiate programs including the University of Arizona, the University of Kentucky, the University of Kansas, and the Ohio State University.