Charles was born in the Palazzo Muti, Rome, Italy, on 31 December 1720, where his father had been given a residence by Pope Clement XI. He spent almost all his childhood in Rome and Bologna. He was the son of the Old Pretender, James, son of the exiled Stuart King James VII and II, and Maria Clementina Sobieska, the granddaughter of John III Sobieski, most famous for the victory over the Ottoman Turks in the 1683 Battle of Vienna.
He had a privileged childhood in Rome, where he was brought up Catholic in a loving but argumentative family. As the legitimate heirs to the thrones of England, Scotland, and Ireland—according to the Jacobite succession—his family lived with a sense of pride, and staunchly believed in the divine right of kings. Regaining the thrones of England and Scotland for the Stuarts was a constant topic of conversation in the household, principally reflected in his father's often morose and combative moods.
His grandfather, James II of England and VII of Scotland, ruled the country from 1685 to 1688. He was deposed when Parliament invited the Dutch Protestant William III and his wife Princess Mary, King James' eldest daughter, to replace him in the Revolution of 1688. Many Protestants, including a number of prominent parliamentarians, had been worried that King James aimed to return England to the Catholic fold. Since the exile of James, the "Jacobite Cause" had striven to return the Stuarts to the thrones of England and Scotland, which were united in 1603 under James VI and I, with the parliaments joined by the Acts of Union in 1707 as the United Kingdom of Great Britain. Charles Edward played a major part in the pursuit of this goal.
In 1734, Charles Edward observed the French and Spanish siege of Gaeta, his first exposure to war. His father managed to obtain the renewed support of the French government in 1744, whereupon Charles Edward travelled to France with the sole purpose of commanding a French army that he would lead in an invasion of England. The invasion never materialised, as the invasion fleet was scattered by a storm. By the time the fleet regrouped, the British fleet realised the diversion that had deceived them and resumed their position in the Channel. Undeterred, Charles Edward was determined to continue his quest for the restoration of the Stuarts.
In December 1743, Charles's father named him Prince Regent, giving him authority to act in his name. Eighteen months later, he led a French-backed rebellion intended to place his father on the thrones of England and Scotland. Charles raised funds to fit out two ships: the Elisabeth, an old man-of-war of 66 guns, and the Du Teillay (sometimes called Doutelle), a 16-gun privateer, which successfully landed him and seven companions at Eriskay on 23 July 1745. Charles had hoped for support from a French fleet, but it was badly damaged by storms, and he was left to raise an army in Scotland.