Bill McKell was born in Pambula, New South Wales, the eldest of four children. His father, Robert Pollock McKell, was a butcher who moved the family to Surry Hills in Sydney in 1898. Three years later he abandoned them. For the rest of his life, McKell concealed the matter by saying his father had died young. The family moved to Redfern, with McKell's mother working to support the family. He was educated at Bourke Street Public School in Surry Hills. McKell supplemented the family income by working part-time. As well as being a good student, McKell was a talented sportsman.