Dangerfield was born in Babylon, in Suffolk County, Long Island, New York. He was the son of Jewish parents, Dorothy "Dotty" (Teitelbaum) and the vaudevillian performer Phil Roy (Phillip Cohen). His mother was born in Hungary. Dangerfield's father was rarely home; Rodney would normally see him only twice a year.

In the early 1960s he started down what would be a long road toward rehabilitating his career as an entertainer, still working as a salesman by day. He divorced his first wife Joyce in 1961, and returned to the stage, performing at many hotels in the Catskill Mountains, but still finding minimal success. He fell into debt (about $20,000 by his own estimate), and couldn't get booked. As he would later joke, "I played one club--it was so far out, my act was reviewed in Field & Stream."  He came to realize that what he lacked was an "image", a well-defined on-stage persona that audiences could relate to, one that would distinguish him from other comics. After being shunned by some premier comedy venues, he returned to the East Coast where he began developing a character for whom nothing goes right.  He took the name Rodney Dangerfield, which had been used as the comical name of a faux cowboy star by Jack Benny on his radio program at least as early as the December 21, 1941, broadcast, and later as a pseudonym by Ricky Nelson on the TV program The Adventures of Ozzie and Harriet. The Benny character, who also received little or no respect from the outside world, served as a great inspiration to Dangerfield while he was developing his own comedy character. The "Biography" program also tells of the time Benny visited Dangerfield backstage after one of his performances. During this visit Benny complimented him on developing such a wonderful comedy character and style. However, Jack Roy remained Dangerfield's legal name, as he mentioned in several interviews. During a question-and-answer session with the audience on the album No Respect, Dangerfield joked that his real name was Percival Swetwater.

Did he receive a lot of criticism in his early career?