Yawkey was born in Detroit on February 21, 1903 to insurance executive Thomas J. Austin and his wife Augusta. Augusta was the eldest child of William Clyman Yawkey, who had become wealthy in the lumber and iron ore industries of the Midwestern United States. In addition to these interests, William Clyman Yawkey had agreed in principle to buy the Detroit Tigers baseball team in 1903, but he died before the deal closed. His son, William H. "Bill" Yawkey, eventually completed the purchase, though the younger Yawkey had little interest in the team and allowed team executive Frank Navin to control day-to-day operations and eventually purchase part of the team.