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Louis-Dreyfus was born in New York City. Her American-born mother, Judith (nee LeFever), was a writer and special needs tutor, and her French-born father, Gerard Louis-Dreyfus, chaired Louis Dreyfus Energy Services. She is a great-great-granddaughter of Leopold Louis-Dreyfus, who in 1851 founded the Louis Dreyfus Group, a French commodities and shipping conglomerate, which members of her family control into the 21st century. Her paternal grandfather, Pierre Louis-Dreyfus, was president of the Louis Dreyfus Group.

As part of her comedic training, Louis-Dreyfus appeared in The Second City, one of Chicago's best-known improvisation theatre groups (whose alumni include Alan Arkin, Steve Carell, Stephen Colbert, Tina Fey, Amy Poehler, and Shelley Long). It was her performance with The Practical Theatre Company at their "Golden 50th Anniversary Jubilee" that led to her being asked to join the cast of NBC's Saturday Night Live at the age of 21.  Louis-Dreyfus was subsequently made into a cast member on Saturday Night Live from 1982 to 1985, becoming the youngest female cast member in the history of the program at that time. During her time on SNL, she appeared alongside several actors who would later rise to prominence, such as Eddie Murphy, Jim Belushi, Billy Crystal, and Martin Short. It was during her third and final year on SNL that she met writer Larry David during his only year on the show, who would later co-create Seinfeld. Louis-Dreyfus has commented that her casting on SNL was a "Cinderella-getting-to-go-to-the-ball kind of experience"; however, she has also admitted that at times it was often quite tense, stating that she "didn't know how to navigate the waters of show business in general and specifically doing a live sketch-comedy show".  Following her 1985 departure from SNL, Louis-Dreyfus appeared in several films, including the Woody Allen-directed Hannah and Her Sisters (1986); Soul Man (1986), starring C. Thomas Howell; and National Lampoon's Christmas Vacation (1989), in which she starred alongside fellow SNL alum Chevy Chase. In 1987, Louis-Dreyfus appeared in the NBC sitcom pilot The Art of Being Nick, an intended spin-off from Family Ties starring Scott Valentine. When the pilot did not make it to series, Louis-Dreyfus was retained by producer Gary David Goldberg for a role on his new sitcom Day by Day, as the sarcastic and materialistic neighbor, Eileen Swift. Premiering in early 1988, Day by Day aired for two seasons on NBC before being cancelled.
Julia Louis-Dreyfus