He was born in London to Thomas Hood and Elizabeth Sands in the Poultry (Cheapside) above his father's bookshop. Hood's paternal family had been Scottish farmers from the village of Errol near Dundee. The Elder Hood was a partner in the business of Verner, Hood, and Sharp, and was a member of the Associated booksellers. Hood's son, Tom Hood, claimed that his grandfather had been the first to opened up the book trade with America and he had great success in new editions of old books.
"Next to being a citizen of the world," writes Thomas Hood in his Literary Reminiscences, "it must be the best thing to be born a citizen of the world's greatest city." On the death of her husband in 1811, Mrs Hood moved to Islington, where Thomas Hood had a schoolmaster who, appreciating his talents, "made him feel it impossible not to take an interest in learning while he seemed so interested in teaching." Under the care of this "decayed dominie", he earned a few guineas—his first literary fee—by revising for the press a new edition of Paul and Virginia.
Hood left his private school master at 14 years of age and was admitted soon after into the counting house of a friend of his family, where he "turned his stool into a Pegasus on three legs, every foot, of course, being a dactyl or a spondee."; However, the uncongenial profession affected his health, which was never strong,and he began to study engraving. The exact nature and course of his study is unclear and various sources tell differe..