Palmer was born to Doris (Morrison) and Milfred Jerome "Deacon" Palmer (1905-1976) in Latrobe, Pennsylvania, a working-class steel mill town. He learned golf from his father, who had suffered from polio at a young age and was head professional and greenskeeper at Latrobe Country Club, which allowed young Arnold to accompany his father as he maintained the course. Palmer attended Wake Forest College on a golf scholarship. He left upon the death of close friend Bud Worsham (1929-1950) and enlisted in the U.S. Coast Guard, where he served for three years, 1951-1954.

Palmer has had a diverse golf-related business career, including owning the Bay Hill Club and Lodge in Orlando, Florida, which is the venue for the PGA Tour's Arnold Palmer Invitational (renamed from the Bay Hill Invitational in 2007), helping to found The Golf Channel, and negotiating the deal to build the first golf course in the People's Republic of China. This led to the formation of Palmer Course Design in 1972, which was renamed Arnold Palmer Design Company when the company moved to Orlando, Florida, in 2006. Palmer's design partner was Ed Seay.  Palmer designed more than 300 golf courses in 37 states, 25 countries, and five continents (all except Africa and Antarctica), including the first modern course built in China, in 1988. In 1971, he purchased Latrobe Country Club (where his father used to be the club professional) and owned it until his death. The licensing, endorsements, spokesman associations and commercial partnerships built by Palmer and McCormack are managed by Arnold Palmer Enterprises. Palmer was also a member of the American Society of Golf Course Architects.  In 1997, Palmer and fellow golfer Tiger Woods initiated a civil case in an effort to stop the unauthorized sale of their images and alleged signatures in the memorabilia market. The lawsuit was filed against Bruce Matthews, the owner of Gotta Have It Golf, Inc. and others. Matthews and associated parties counter-claimed that Palmer and associated businesses committed several acts, including breach of contract, breach of implied duty of good faith and violations of Florida's Deceptive and Unfair Trade Practices Act. On March 12, 2014, a Florida jury ruled in favor of Gotta Have It on its breach of contract and other related claims. The same jury rejected the counterclaims of Palmer and Woods, and awarded Gotta Have It $668,346 in damages.  One of Palmer's most recent products (mass-produced starting in 2001) is a branded use of the beverage known as the Arnold Palmer, which combines sweet iced tea with lemonade.

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