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Lucas was born and raised in Modesto, California, the son of Dorothy Ellinore Lucas (nee Bomberger) and George Walton Lucas, Sr., who owned a stationery store. He is of German, Swiss-German, English, Scottish, and distant Dutch and French descent. Growing up, Lucas had a passion for cars and motor racing, which later inspired his films 1:42.08 and American Graffiti. Long before Lucas became obsessed with filmmaking, he yearned to be a race-car driver, and he spent most of his high school years racing on the underground circuit at fairgrounds and hanging out at garages.

Following the release of the first Star Wars film, Lucas worked extensively as a writer and producer, including on the many Star Wars spinoffs made for film, television, and other media. Lucas acted as executive producer for the next two Star Wars films, commissioning Irvin Kershner to direct The Empire Strikes Back, and Richard Marquand to direct Return of the Jedi, while receiving a story credit on the former and sharing a screenwriting credit with Lawrence Kasdan on the latter. He also acted as executive producer and story writer on all four of the Indiana Jones films, which his colleague and good friend Steven Spielberg directed.  Other successful projects where Lucas acted as a producer or writer in this period include Kurosawa's Kagemusha (1980), Lawrence Kasdan's Body Heat (1981), Jim Henson's Labyrinth (1986), Godfrey Reggio's Powaqqatsi (1986), Don Bluth's The Land Before Time (1988), and the Indiana Jones television spinoff The Young Indiana Jones Chronicles (1992-96). There were unsuccessful projects, however, including More American Graffiti (1979), Willard Huyck's Howard the Duck (1986), which was the biggest flop of Lucas's career, Ron Howard's Willow (1988), Coppola's Tucker: The Man and His Dream (1988), and Mel Smith's Radioland Murders (1994).  The animation studio Pixar was founded in 1979 as the Graphics Group, one third of the Computer Division of Lucasfilm. Pixar's early computer graphics research resulted in groundbreaking effects in films such as Star Trek II: The Wrath of Khan and Young Sherlock Holmes, and the group was purchased in 1986 by Steve Jobs shortly after he left Apple Computer. Jobs paid Lucas US$5 million and put US$5 million as capital into the company. The sale reflected Lucas' desire to stop the cash flow losses from his 7-year research projects associated with new entertainment technology tools, as well as his company's new focus on creating entertainment products rather than tools. A contributing factor was cash-flow difficulties following Lucas' 1983 divorce concurrent with the sudden dropoff in revenues from Star Wars licenses following the release of Return of the Jedi.  The sound-equipped system THX Ltd. was founded by Lucas and Tomlinson Holman. The company was formerly owned by Lucasfilm, and contains equipment for stereo, digital, and theatrical sound for films, and music. Skywalker Sound and Industrial Light & Magic, are the sound and visual effects subdivisions of Lucasfilm, while Lucasfilm Games, later renamed LucasArts, produces products for the gaming industry.
George Lucas