Skaife began racing karts in the 1980s in his native New South Wales, before moving to Melbourne to complete his apprenticeship under Fred Gibson. His first car race was at Amaroo Park in 1984, at the wheel of a Holden Torana XU-1 sports sedan, which was partly built by his father, Russell. In 1985 Skaife joined the NSW Ford Laser Series, finishing second in the series. Skaife again finished runner up in the 1986 NSW Laser Series and winning the Victorian Series of the same year. Skaife was due to compete in his maiden race at Bathurst in 1986, however his co-driver and team owner, Peter Williamson, crashed the team's Toyota Celica Supra MA61 at close to during practice with Williamson suffering a broken jaw in the crash due to the cars onboard fire extinguisher breaking free of its mountings and hitting the veteran Sydney driver in the mouth (Williamson wore an open face helmet). Subsequently, with Williamson confined to a hospital bed in Bathurst and the Supra in need of major repair, the entry was withdrawn.