Stetson was born in New Jersey, the 8th of 12 children. His father, Stephen Stetson, was a hatter. As a youth, John Stetson worked with his father until John was diagnosed with tuberculosis and his doctor predicted he had only a short time to live. Given this, he left the hat-making business to explore the American West, afraid this would be his only chance to see it. There he met drovers, bullwhackers and cowboys. The former hat-maker turned a critical eye to the flea-infested coonskin caps favored by many of the gold seekers, and wondered whether fur-felt would work for a lightweight, all-weather hat suitable for the West.