Walston was born Herman Raymond Walston on November 2, 1914, in Laurel, Mississippi, the second son and youngest of three children born to lumberjack Harry Norman Walston (1881-1946) and Mittie (nee Kimball) Walston (December 25, 1883-August 16, 1950). He had an older sister, Carrie (1906-1982), and an older brother, Earl (February 4, 1908 - December 4, 1998). His family moved from Mississippi to New Orleans, Louisiana around 1925. He started acting at an early age, beginning his tenure as a spear carrier rounding out productions at many New Orleans theaters.

Walston was popular with Margo Jones's team of actors before he traveled to Cleveland, Ohio, where he spent 3 years with the Cleveland Play House. He then traveled to New York City, where he made his Broadway debut in a 1945 production of Hamlet. Three years later, Walston became one of the first members admitted to the newly formed Actors Studio.  In 1949, he appeared in the short-lived play Mrs. Gibbons' Boys, directed by George Abbott, who later cast him as Satan (who bore the name "Mr. Applegate") in the 1955 musical Damn Yankees opposite Gwen Verdon as his sexy aide Lola. The chemistry between the two was such that they both garnered critical success and won awards for their roles. After a decade in New York theater, he won a Tony Award.  He starred as Luther Billis in the 1951 London production of South Pacific. He reprised that role in the 1958 film adaptation. He and Juanita Hall (as Bloody Mary) were the only cast members to appear in both the stage and movie versions. Additional Broadway credits included The Front Page, Summer and Smoke, King Richard III, Wish You Were Here, and House of Flowers. In 1957, Actress and Producer Katharine Cornell placed him in a role on Broadway in Robert E. Sherwood's Pulitzer Prize winning play about the Hungarian Revolution of 1956, There Shall Be No Night. The play was adapted for television for a Hallmark Hall of Fame production. He had a prominent role in the Rodgers & Hammerstein musical Me and Juliet, portraying the stage manager of the musical-within-the-musical, but his character did not participate in any of the musical numbers.

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