Hobby was born in Houston, Texas, the only son of William P. Hobby Sr. and Oveta Culp Hobby. Both of his grandfathers were in the Texas Legislature. His father was also a lieutenant governor of Texas and the governor from 1917 to 1921, and his mother, a Democrat, was the first person appointed to the new position of United States Secretary of Health, Education, and Welfare by U.S. President Dwight D. Eisenhower, a Republican. She served in that position, now the United States Department of Health and Human Services, from 1953 to 1955.