Nilsson was born in Bedford-Stuyvesant, Brooklyn in 1941. His paternal grandparents were Swedish circus performers and dancers, especially known for their "aerial ballet" (which is the title of one of Nilsson's albums). His maternal grandparents were the cornerstone of his young life. While his grandmother played piano, his grandfather Charlie supported the family in a tiny railroad apartment on Jefferson St in Brooklyn.

Nilsson is the subject of a 2006 documentary, Who Is Harry Nilsson (And Why Is Everybody Talkin' About Him)? produced by David Leaf and John Schienfeld. The film was screened in 2006 at the Seattle International Film Festival and the Santa Barbara International Film Festival. In August 2006, the film received its Los Angeles premiere when it was screened at the 7th Annual Mods & Rockers Film Festival followed by a panel discussion about Nilsson featuring the filmmakers and two friends of Nilsson, producer Richard Perry and attorney/executive producer Lee Blackman.  The filmmakers re-edited the film with rare found footage of Nilsson, further interviews, and family photographs, and finally released it on September 17, 2010 at selected theaters in the United States. A DVD, including additional footage not in the theatrical release, was released on October 26, 2010.  Nilsson's final album, tentatively titled Papa's Got a Brown New Robe (produced by Mark Hudson) was not released, though several demos from the album were available on promotional CDs and online.  The musical Everyday Rapture features three songs by Nilsson and, similarly, the film A Good Year features "Gotta get up", "Jump into the fire" and "How can I be sure of you".  On July 29, 2013, Sony Music released a definitive box-set of his RCA era albums called The RCA Albums Collection. Each of the albums in the 17-CD set had additional bonus tracks, along with 3 of the 17 discs that contained rarities and outtakes spanning his entire career. Additionally, several weeks later on August 13, Flash Harry was finally issued on CD also featuring additional material. Completing the two CD releases, the first book written about Nilsson was published covering his life story.

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