Wallace was the second son of a knight, Malcolm Wallace, said to have been born in Elderslie (Renfrewshire) around 1272. There are still the remains of a house in Elderslie that some people think is his birthplace. Others say he was born in Ayrshire, which is where he spent his youth.

William's family owned land, but were not wealthy enough, or powerful enough, to give him the connections to rise through the ranks of the military. So he took the only other path to success open to him - he went to train for the priesthood at Paisley Abbey.

When his father was killed, by an English knight named Fenwick at Loudon Hill in Ayrshire in 1291, William's hatred of the English occupiers of Scotland was fired up. Later that same year, William had his first brush with the authorities. He was visiting his uncle in Kilspindie near Dundee when he was picked on by English soldiers. The latter were out for fun, "noising up the locals" but they made a mistake trying to harass William. There was a heated argument, with swords being drawn. William stabbed an English soldier called Selby in order to escape. Unfortunately, Selby's father was the town constable, and henceforth William was a marked man.

From then on he was an outlaw, and had to abandon his studies for the priesthood. He went back to his family in Riccarton, and from there into hiding for five years. There are only sketchy details of those years, when William hid in the vast forests of Southern Scotland. Many people believe that the legend of Robin Hood is based on his exploits - collecting a band of supporters, helping the poor, harassing the English and evading ambush and capture many times. In 1296 he began his military campaign, culminating in the Battle of Stirling Bridge.