Te Kanawa was born in Gisborne, New Zealand. She has both Māori and European ancestry but little is known about her birth parents as she was adopted as an infant. In her teens and early 20s, Te Kanawa was a pop star and popular entertainer at clubs in New Zealand.

She was formally trained in operatic singing by the celebrated Dame Sister Mary Leo, who was New Zealand's best-known opera coach. She began her singing career as a mezzo-soprano, but later developed into a soprano. Her recording of the "Nuns' Chorus" from the Strauss operetta Casanova was New Zealand's first gold record.

In 1965 she won the prestigious Mobil Song Quest, entered by all types of singers, jazz, pop and classical, with her performance of Puccini's "Vissi d'arte" from Tosca. As the winner, she received a grant to study in London. In 1966, she enrolled at the London Opera Centre, and she first appeared on stage as the second lady in Die Zauberflöte. In 1969, she sang Elena in Rossini's La donna del lago at the Camden Festival. After being offered a three-year contract, she made her debut at the Royal Opera House, Covent Garden as 'Xenia' in Boris Godunov and a 'Flower Maiden' in Parsifal in 1970.