Billie Holiday had a difficult childhood, which greatly affected her life and career. Much of her childhood is clouded by conjecture and legend, some of it propagated by her autobiography, Lady Sings the Blues, published in 1956. This account is known to contain many inaccuracies.

Her professional pseudonym was taken from Billie Dove, an actress she admired, and Clarence Holiday, her probable father. At the outset of her career, she spelled her last name "Halliday," presumably to distance herself from her neglectful father, but eventually changed it back to "Holiday."

Holiday's grandfather was one of 17 children of an enslaved black woman in Virginia and a white Irish plantation owner. There are conflicting reports about whether her thirteen-year-old mother, Sadie Fagan, and fifteen-year-old father, Clarence Holiday, ever married, but if they did, they did not live together for any significant period. Clarence Holiday played guitar and banjo professionally and joined jazz-band leader Fletcher Henderson in the early 1930s, so he was on the road much of the time and was apparently not a family man.

There is some controversy regarding Holiday's paternity, stemming from a copy of her birth certificate in the Baltimore archives that lists the father as a "Frank DeViese". Some historians consider this an anomaly, probably inserted by a hospital or government worker. Billie grew up in the poor section of Baltimore, Maryland. According to her autobiography, her house was the first on their street to have electricity. Her parents married when she was three, but they soon divorced, leaving her to be raised largely by her mother and other relatives. At the age of 11, she reported that she had been raped. That claim, combined with her frequent truancy, resulted in her being sent to The House of the Good Shepherd, a Catholic reform school, in 1925. It was only through the assistance of a family friend that she was released two years later.[4] Scarred by these experiences, Holiday moved to New York City with her mother in 1928. In 1929 Holiday's mother discovered a neighbor, Wilbert Rich, in the act of raping Billie; Rich was sentenced to three months in jail.

Early singing career
According to Billie Holiday's accounts, she was recruited by a brothel, worked as a prostitute, and was eventually imprisoned for a short time. It was in Harlem in the early 1930s that she started singing for tips in various night clubs. According to legend, penniless and facing eviction, she sang "Trav'lin All Alone" in a local club and reduced the audience to tears. She later worked at various clubs for tips, ultimately landing at Pod's and Jerry's, a well known Harlem jazz club. Her early work history is hard to verify, though accounts say she was working at a club named Monette's in 1933 when she was discovered by talent scout John Hammond.

Hammond arranged for Holiday to make her recording debut on a 1933 Benny Goodman date, and Goodman was also on hand in 1935, when she continued her recording career with a group led by pianist Teddy Wilson. Their first collaboration included "What A Little Moonlight Can Do" and "Miss Brown To You", which helped to establish Billie Holiday as a major vocalist. She began recording under her own name a year later, producing a series of extraordinary performances with groups comprising the Swing Era's finest musicians.

Among the musicians who accompanied her frequently was tenor saxophonist Lester Young, who had been a boarder at her mother's house in 1934 and with whom she had a special rapport. "Well, I think you can hear that on some of the old records, you know. Some time I'd sit down and listen to 'em myself, and it sound like two of the same voices, if you don't be careful, you know, or the same mind, or something like that."  Young nicknamed her "Lady Day" and she, in turn, dubbed him "Prez." In the late 1930s, she also had brief stints as a big band vocalist with Count Basie (1937) and Artie Shaw (1938). The latter association placed her among the first black women to work with a white orchestra, an arrangement that went against the temper of the times.

The Commodore Years and "Strange Fruit"
Holiday was recording for Columbia in the late 1930s when she was introduced to "Strange Fruit," a song based on a poem about lynching written by Abel Meeropol, a Jewish schoolteacher from the Bronx. Meeropol used the pseudonym "Lewis Allen" for the poem, which was set to music and performed at teachers' union meetings. It was eventually heard by Barney Josephson, proprietor of Café Society, an integrated nightclub in Greenwich Village, who introduced it to Holiday. She performed it at the club in 1939, with some trepidation, fearing possible retaliation. Holiday later said that the imagery in "Strange Fruit" reminded her of her father's death, and that this played a role in her persistence to perform it. In a 1958 interview, she also bemoaned the fact that many people did not grasp the song's message: "They'll ask me to 'sing that sexy song about the people swinging'," she said.

When her producers at Columbia found the subject matter too sensitive, Commodore Records' Milt Gabler agreed to record it for his label. That was done in April, 1939 and "Strange Fruit" remained in her repertoire for twenty years. She later recorded it again for Verve. While the Commodore release did not get airplay, the controversial song sold well, but Gabler attributes that mostly to the record's other side, "Fine and Mellow," which was a juke box hit.

Decca Records and "Lover Man"
In addition to owning Commodore Records, Milt Gabler was an A&R man for Decca Records, and he signed Holiday to the label in 1944. Her first recording for Decca, "Lover Man," was a song written especially for her by Jimmy Davis, Roger "Ram" Ramirez, and Jimmy Sherman. Although its lyrics describe a woman who has never known love ("I long to try something I never had"), its theme—a woman longing for a missing lover—and its refrain, "Lover man, oh, where can you be?", struck a chord in wartime America and the record became one of her biggest hits.

Holiday continued to record for Decca until 1950, including sessions with the Duke Ellington and Count Basie orchestras, and two duets with Louis Armstrong. Holiday's Decca recordings featured big bands and, sometimes, strings, contrasting her intimate small group Columbia accompaniments. Some of the songs from her Decca repertoire became signatures, including "Don't Explain" and "Good Morning Heartache".