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Born in New York City, Hilton is the oldest of four children of Richard and Kathy Hilton (née Avanzino). She has a sister, Nicky, and brothers, Barron and Conrad.

On the maternal side of her family, She is a niece of two child stars of the 1970s, Kim Richards and Kyle Richards. Hilton was related by marriage to Nicole Richie's godmother, Nancy Davis, when Nancy's brother, Greg, was married to Kim Richards.

Hilton's paternal grandparents are hotel chairman Barron Hilton, and his wife, the former Marilyn Hawley; Barron Hilton's parents were Hilton Hotels founder Conrad Hilton and his first wife, Mary Barron.

Hilton moved between several exclusive homes in her youth, including a suite in the Waldorf-Astoria Hotel in Manhattan, Beverly Hills, and the Hamptons. She attended her freshman year of high school at the Marywood-Palm Valley School in Rancho Mirage, California followed by the Dwight School in New York for her sophomore and junior years. She was then transferred to the Canterbury School, in New Milford, Connecticut where She was a member of the hockey team. However, in early 1999, She was expelled for violating the school rules.^[3] Hilton later earned her GED.^[4][5]

In December 2007, Hilton's grandfather Barron Hilton pledged 97 percent of his estate to a charitable organization founded by his father, the Conrad N. Hilton Foundation. An immediate pledge of $1.2 billion was made, with a further $1.1 billion due after his death. He cited his father's actions as the motivation for his pledge. According to reports, the potential inheritance of his grandchildren is sharply diminished.