Elizabeth Cady, the eighth of eleven children, was born in Johnstown, New York, to Daniel Cady and Margaret Livingston Cady. Five of her siblings died in early childhood or infancy. A sixth, her brother Eleazar, died at age 20 just prior to his graduation from Union College in Schenectady, New York. Only Elizabeth and her four sisters lived to old age. Later in life, Elizabeth named her two daughters after two of her sisters, Margaret and Harriet.
Daniel Cady was a prominent attorney who served one term in the Congress of the United States (Federalist; 1814-1817) and later became a judge. Judge Cady introduced his daughter to the law. He and her brother-in-law, Edward Bayard (also a lawyer), planted the earliest seeds which grew into her legal and social activism. Even as a young girl, she enjoyed perusing her father's law library and debating legal issues with his law clerks. This early exposure to law caused Stanton to realize how severely the law favored men over women, particularly married women. Her realization that married women had virtually no property rights, income or employment rights, or custody rights over their own children, set her to work on changing these inequities.
Stanton's mother, Margaret, a descendant of early Dutch settlers, was the daughter of Colonel James Livingston, an officer in the Continental Army during the American Revolution. He fought at the Battle of Saratoga and the Battle of Quebec (1775), and assisted in the capture of Benedict Arnold at West Point, New York.
Margaret Cady was a commanding woman, almost six feet tall, whom Stanton routinely described as "queenly." Harriot Eaton Stanton Blatch, Elizabeth's daughter, remembered her grandmother as being fun, affectionate, and lively.  Stanton did not share that view. Emotionally devastated by the loss of so many children, Margaret fell into a depression that prevented her full involvement in the lives of her children. This left a maternal void in Stanton's childhood.
Judge Cady coped with the loss by immersing himself in his work. Many of the childrearing responsibilities fell to Stanton's elder sister Tryphena and Tryphena's husband, Edward Bayard. Tryphena was eleven years older than Elizabeth. Edward was a Union College classmate of Eleazar Cady's and son of James A. Bayard, Sr., a U.S. Senator from Wilmington, Delaware. At the time of his engagement and marriage to Tryphena, Edward worked as an apprentice in Daniel Cady's law office.
Like many men of his day, Judge Cady was a slave holder. Peter Teabout, a slave in the Cady household and later a freeman, who took care of Elizabeth and her sister Margaret, is remembered with particular fondness by Stanton in her memoir, Eighty Years & More. It was not only her closeness to Peter, but also her exposure to the abolition movement as a young woman during a visit to her cousin, Gerrit Smith, in Peterboro, New York that led to her abolitionist sentiments.