Elizabeth Taylor was born and lived her early years at her parents' home, at 8 Wildwood Road in Hampstead Garden Suburb, a northwestern suburb of London; the second child of Francis Lenn Taylor (1897–1968) and Sara Viola Warmbrodt (1895–1994), who were Americans residing in England. Taylor's older brother, Howard Taylor, was born in 1929. Her parents were originally from Arkansas City, Kansas. Francis Taylor was an art dealer, and Sara was a former actress whose stage name was "Sara Sothern." Sothern retired from the stage when she and Francis married in 1926 in New York City. Taylor's two first names are in honor of her paternal grandmother, Elizabeth Mary (Rosemond) Taylor.
One of their closest friends in England, Colonel Victor Cazalet, was an important influence on the family. As a rich and well-connected bachelor, a Member of Parliament and close friend of Winston Churchill, he was both a passionate lover of art and theater, and encouraged the Taylor family to think of England as their permanent home. As a Christian Scientist and lay preacher, his links with the family were also spiritual. He also became Elizabeth's godfather. As a young child, suffering from a severe infection that kept her in bed for weeks, she "begged" for his company: "Mother, please call Victor and ask him to come and sit with me."
Biographer Alexander Walker suggests that "it is likely that Elizabeth's later conversion to the Jewish faith, and her life-long support for Israel, owes something to the sympathetic views she heard being expressed at home in these formative years." Walker notes that Cazalet was an active campaigner for a Jewish homeland, and her mother also worked actively in various charities, which included sponsoring fundraisers for Zionism. Her mother recalls the influence that Cazalet had on Elizabeth:
"Victor sat on the bed and held Elizabeth in his arms and talked to her about God. Her great dark eyes searched his face, drinking in every word, believing and understanding."