Alkatiri's ancestors were Hadhrami merchants who lived in Portuguese Timor, he was born in Dili, and had 10 other siblings. He left East Timor in 1970 for post-secondary studies in Portuguese Angola, returning to East Timor as one of the founders of Fretilin, becoming its Minister for Political Affairs. Following Fretilin's declaration of independence for the Democratic Republic of Timor-Leste on 28 November 1975, Alkatiri was sent overseas as part of a high-level diplomatic mission. After Indonesia invaded the nascent nation on 7 December 1975, Alkatiri and his colleagues were unable to return, and he established the headquarters of the Fretilin External Delegation in Maputo, Mozambique.