Netanyahu was born in Jerusalem on October 2, 1949, to Ben-Zion Netanyahu, a professor of history, and his wife Tsilla. At the age of 18 he began his military training. Netanyahu served as a soldier and officer in an elite unit of the Israel Defense Forces from 1967 to 1972. In this he followed his brother, Yonatan ("Yoni") Netanyahu, the celebrated hero of the 1976 Entebbe rescue operation who was killed in action freeing a planeload of Israelis held hostage in Uganda. Another brother, Iddo Netanyahu, was a physician.
Netanyahu attended Cheltenham High School in Philadelphia and graduated from the Massachusetts Institute of Technology in 1976. After graduating, he held several industrial consulting and managerial positions in the United States. In 1976 he returned to Israel to become director of the Jonathan Institute, founded to study ways for democratic governments to combat terrorism. With his wife Sarah, he had one son, Yasir.