Ali Zafar was born in Lahore, Pakistan to two professors who teach at Punjab University. He initially attended the C.A.A. Public School and later moved to the Beaconhouse School System from where he topped in his matric examinations. He later graduated from the National College of Arts as an artist in 2002 with honours. Ali Zafar has often spoken about his childhood battle with obesity and this is reflected in his song 'Pant-Shirt'. He has one younger brother called Bilal Zafar who studies in England.
Before entering the Pakistani musical scene, Ali Zafar worked as a model for several commercial advertisement besides acting in television. He worked in the Pakistani television serial Lunda-Bazar, Kanch Ke Par and in the teenage sitcom College Jeans (which was an immediate hit among youngsters). He was also in the music video of Preeto sung by Abrar-ul-Haq