Barkley was born and raised in Leeds, Alabama, ten miles (16 km) outside Birmingham, and attended Leeds High School. As a junior, Barkley stood 5 ft 10 in (1.78 m) and weighed 220 pounds (100 kg). He failed to make the varsity team and was named as a reserve. However, during the summer Barkley grew to 6 ft 4 in (1.93 m) and earned a starting position on the varsity as a senior.

Barkley is known for his compulsive gambling. In an interview with ESPN's Trey Wingo, Barkley revealed that he lost approximately $10 million through gambling. In addition, he also admitted to losing $2.5 million "in a six-hour period" while playing blackjack. Although Barkley openly admits to his problem, he claims it is not serious since he can afford to support the habit. When approached by fellow TNT broadcaster Ernie Johnson about the issue, Barkley replied, "It's not a problem. If you're a drug addict or an alcoholic, those are problems. I gamble for too much money. As long as I can continue to do it I don't think it's a problem. Do I think it's a bad habit? Yes, I think it's a bad habit. Am I going to continue to do it? Yes, I'm going to continue to do it."  Despite suffering big losses, Barkley also claims to have won on several occasions. During a trip to Las Vegas, he claims to have won $700,000 from playing blackjack and betting on the Indianapolis Colts to defeat the Chicago Bears in Super Bowl XLI. He went on to state, however, "No matter how much I win, it ain't a lot. It's only a lot when I lose. And you always lose. I think it's fun, I think it's exciting. I'm gonna continue to do it, but I have to get to a point where I don't try to break the casino 'cause you never can."  In May 2008, the Wynn Las Vegas casino filed a civil complaint against Barkley, alleging that he had failed to pay a $400,000 debt stemming from October 2007. Barkley responded by taking blame for letting time lapse on the repayment of the debt and promptly paid the casino. After repaying his debt, Barkley stated during a pregame show on TNT, "I've got to stop gambling...I am not going to gamble anymore. For right now, the next year or two, I'm not going to gamble... Just because I can afford to lose money doesn't mean I should do it."

What else did he bet on?
he also admitted to losing $2.5 million "in a six-hour period" while playing blackjack.