Terry was born in Coventry, England, the third surviving child born into a theatrical family. Her parents, Benjamin (1818–96), of Irish descent, and Sarah ("née" Ballard, 1819–92), of Scottish ancestry, were comic actors in a Portsmouth-based touring company, (where Sarah's father was a Wesleyan minister) and had 11 children. At least five of them became actors: Kate, Ellen, Marion, Florence, and Fred. Two other children, George and Charles, were connected with theatre management. Kate (the grandmother of John Gielgud) and Marion were particularly successful on stage.