Sharon Rachel Levy was born on 9 October 1952 in London, United Kingdom, as the daughter of Don Arden (born Harry Levy, 1926–2007), who was an English music promoter and rock and roll entrepreneur, and his wife, Hope (née Shaw, 1916–1999). She has a brother, David. She describes herself as of Irish and Ashkenazi Jewish heritage.
Osbourne revealed she was surrounded by violence during her childhood and that it was a normal occurrence to see her father threatening someone, or brandishing a firearm. Osbourne's father, Don Arden, was a rock and roll entrepreneur who managed Black Sabbath and sacked Ozzy Osbourne from the group. Levy began dating future husband Ozzy Osbourne in 1979 after Black Sabbath fired him and took over his management from the Arden organisation. Levy coordinated the recruitment of a backing band (Randy Rhoads, Bob Daisley, and Lee Kerslake) for the recording of the Blizzard of Ozz album and helped Ozzy launch what became a successful solo career. Arden resented his daughter for dating Ozzy and managing his career. In her memoir, Osbourne relates that he had robbed her, once tried to kill her, and once told Ozzy that she had tried to seduce him, in an effort to turn Ozzy against her. She soon lost contact with her father and did not speak to him for 20 years. In an interview in 2001, she commented that her father has never seen her children and that "he never will". Osbourne had told her children that their grandfather was dead, but they unknowingly saw him for the first time when Osbourne was shouting abuse at him on a street in Los Angeles. When asked who she was shouting at, she replied Tony Curtis. They were reunited in 2001 and he then had a role in their reality show, The Osbournes. In August 2004, Osbourne stated her father had Alzheimer's disease and she paid for his care in the last years of his life.
Osbourne's relationship with her mother was also damaged. At the age of 17, Osbourne lost her virginity and realized two months later that she was pregnant. By her account, pressure from others, principally her mother, influenced her decision to have an abortion, which Osbourne has described as the biggest mistake in her life. While visiting her parents on a later occasion, her mother's dogs attacked her and it was some time before her mother appeared to call them off. She was pregnant at the time and subsequently lost the baby. According to a 2009 article in The Guardian, Hope Arden was a cold woman who became even stranger after a serious car accident, something which Osbourne said "unhinged her". When Osbourne was informed of her mother's death, she said "Oh, what a shame" and simply put the phone down.
Sharon and Ozzy, March 2004