Stigler was born in Seattle, Washington, graduated from the University of Washington in 1931 with a B.A. and then spent a year at Northwestern University from which he obtained his M.B.A in 1932. It was during his studies at Northwestern that Stigler developed an interest in economics and decided on an academic career.
Due to a tuition scholarship that he received from the University of Chicago, Stigler enrolled at the university in 1933 to study economics and went on to earn his Ph.D. in economics from the University of Chicago in 1938. His teaching experience began in 1936 at Iowa State College where he taught until 1938. He spent much of World War II at Columbia University, performing mathematical and statistical research for the Manhattan Project. He then spent one year at Brown University. He served at the Columbia faculty from 1947 to 1958.
While at Chicago, he was greatly influenced by Frank Knight, his dissertation supervisor. Friedman, a friend for over sixty years, comments upon this as remarkable since only three or four students ever managed to complete their PhD dissertation under Knight in his 28 years at Chicago. Jacob Viner and Henry Simons also influenced him and, among his students, were W. Allen Wallis and Milton Friedman.