Waters was born McKinley Morganfield in Issaquena County, Mississippi in 1913 (He later told people that he was born in 1915 in Rolling Fork, Mississippi; the reason for this remains unknown). His grandmother Della Grant raised him after his mother died in 1918. His fondness for playing in mud earned him his nickname at an early age. Waters started out on harmonica but by age seventeen he was playing the guitar at parties and "fish fries", emulating two blues artists who were extremely popular in the south, Son House and Robert Johnson. "His thick heavy tone, the dark coloration of his voice and his firm almost stolid manner were all clearly derived from House," wrote Peter Guralnick in Feel Like Going Home, "but the embellishments which he added, the imaginative slide technique and more agile rhythms, were closer to Johnson."
In 1940 Waters moved to St. Louis before playing with Silas Green a year later and returning back to Mississippi. In the early part of the decade he ran a juke house, complete with gambling, moonshine, a jukebox and live music courtesy of Muddy himself. In the Summer of 1941 Alan Lomax came to Stovall, Mississippi, on behalf of the Library of Congress to record various country blues musicians. "He brought his stuff down and recorded me right in my house," Waters recalled in Rolling Stone, "and when he played back the first song I sounded just like anybody's records. Man, you don't know how I felt that Saturday afternoon when I heard that voice and it was my own voice. Later on he sent me two copies of the pressing and a check for twenty bucks, and I carried that record up to the corner and put it on the jukebox. Just played it and played it and said, `I can do it, I can do it.'" Lomax came back again in July of 1942 to record Waters again. Both sessions were eventually released as Down On Stovall's Plantation on the Testament label.
In 1943 Waters headed north to Chicago in hopes of becoming a full-time professional. He lived with a relative for a short period while driving a truck and working in a factory by day and playing at night. Big Bill Broonzy was the leading bluesman in Chicago until his death in 1958 and the city was a very competitive market for a newcomer to become established. Broonzy helped Waters out by letting him open Broonzy's show in the rowdy clubs. In 1945 Waters's uncle gave him his first electric guitar, which enabled him to be heard above the noisy crowds. In 1946 Waters recorded some tunes for Mayo Williams at Columbia but they were never released. Later that year he began recording for Aristocrat, a newly- formed label run by two brothers, Leonard Chess and Phil Chess. In 1947 Waters played guitar with Sunnyland Slim on piano on the cuts "Gypsy Woman" and "Little Anna Mae." These were also shelved, but in 1948 Waters's "I Can't Be Satisfied" and "I Feel Like Going Home" became big and his popularity in clubs began to take off. Soon after, Aristocrat changed their name to Chess and Waters's signature tune, "Rollin' Stone", became a smash hit.