Eaton was born in Inglewood, California and grew up in Southern California. Despite his height, as a youth he was more interested in playing water polo than basketball. After graduating from Westminster High School, Eaton attended the Arizona Automotive Institute in Phoenix and graduated as a service technician. He worked as an auto mechanic for about three years, and was eventually discovered by Tom Lubin while repairing cars in Anaheim in April 1977. Lubin, a chemistry professor, was an assistant basketball coach at Cypress College, and his encouragement led Eaton to enroll at the community college and try out for the basketball team. Eaton developed into a solid junior college player. He averaged 14.3 points per game in two seasons at Cypress, and led the school to the California State Title as a sophomore.