Baldwin was born in 1161 to the previous king Amalric I of Jerusalem and Agnes of Courtenay, and had a fairly happy childhood growing up. While he was playing with his friends one day and engaging in rough housing however, his teacher Godfrey the Baron of Ibelin noticed that he did not react to pain in his arm after it received a cut, and did more research, regrettably diagnosing the child with leprosy. This didn't slow Baldwin down however, and he went on to do great things. Most notably his victory during a battle at the age of sixteen. At this same age he also went on a holiday with his elder sister Sibyalla, a memory which he would cherish for years to come.

Shortly after this he was appointed king of Jerusalem.