Labonte started racing when he was 7 years old, and won a national championship at age 9, before moving on to the short tracks as a teenager. He won short track championships as a child, driving on both dirt and asphalt, in Houston and San Antonio from 1975-1977. During this time, he also met Louisiana businessman Billy Hagan. Hagan offered Labonte a job on his Winston Cup team along with the promise to drive five races that year.