Lynch's father had Scottish, Irish, and English ancestry. His mother was of half Finnish and half German descent. His Irish ancestry can be traced to Galway and as far back as being descended from Rollo, a Viking King.
David Keith Lynch was born on January 20, 1946, in Missoula, Montana, United States, to Donald Walton Lynch, who was a research scientist working for the U.S. Department of Agriculture, and Edwina "Sunny" Lynch (née Sundholm), who was an English language tutor.
The Lynch family often moved around because of Lynch's father's work. When Lynch was two months old, he moved with his parents to Sandpoint, Idaho, and only two years after that, following the birth of his brother John, the family moved to Spokane, Washington. It was there that Lynch's sister Martha was born. The family then moved to Durham, North Carolina, then Boise, Idaho, and then Alexandria, Virginia.