Arthur Compton was born on September 10, 1892, in Wooster, Ohio, the son of Elias and Otelia Catherine (née Augspurger) Compton, who was named American Mother of the Year in 1939 and was of German Mennonite descent.
They were an academic family. Elias was dean of the University of Wooster (later the College of Wooster), which Arthur also attended. Arthur's eldest brother, Karl, who also attended Wooster, earned a Doctor of Philosophy (PhD) degree in physics from Princeton University in 1912, and was president of the Massachusetts Institute of Technology from 1930 to 1948. His second brother Wilson likewise attended Wooster, earned his PhD in economics from Princeton in 1916 and was president of the State College of Washington, later Washington State University from 1944 to 1951. All three brothers were members of the Alpha Tau Omega fraternity.
Compton was initially interested in astronomy, and took a photograph of Halleys Comet in 1910. Around 1913, he described an experiment where an examination of the motion of water in a circular tube demonstrated the rotation of the earth, a device now known as the Compton generator. That year, he graduated from Wooster with a Bachelor of Science degree and entered Princeton, where he received his Master of Arts degree in 1914. Compton then studied for his PhD in physics under the supervision of Hereward L. Cooke, writing his dissertation on The Intensity of X-Ray Reflection, and the Distribution of the Electrons in Atoms'.
When Arthur Compton earned his PhD in 1916, he, Karl and Wilson became the first group of three brothers to earn Ph.D.s from Princeton. Later, they would become the first such trio to simultaneously head American colleges. Their sister Mary married a missionary, C. Herbert Rice, who became the principal of Forman Christian College in Lahore. In June 1916, Compton married Betty Charity McCloskey, a Wooster classmate and fellow graduate. They had two sons, Arthur Alan Compton and John Joseph Compton.
Compton spent a year as a physics instructor at the University of Minnesota in 1916–17, then two years as a research engineer with the Westinghouse Lamp Company in Pittsburgh, where he worked on the development of the sodium-vapor lamp. During World War I he developed aircraft instrumentation for the Signal Corps.
In 1919, Compton was awarded one of the first two National Research Council Fellowships that allowed students to study abroad. He chose to go to the University of Cambridge's Cavendish Laboratory in England. Working with George Paget Thomson, the son of J. J. Thomson, Compton studied the scattering and absorption of gamma rays. He observed that the scattered rays were more easily absorbed than the original source. Compton was greatly impressed by the Cavendish scientists, especially Ernest Rutherford, Charles Galton Darwin and Arthur Eddington, and he ultimately named his second son after J. J. Thomson.
From 1926 to 1927, he taught at the department of chemistry of the University of the Punjab where he was a Guggenheim Fellow.
For a time Compton was a deacon at a Baptist church. "Science can have no quarrel", he said, "with a religion which postulates a God to whom men are as His children."