Bettelheim is born in Vienna of a non-religious middle-class Jewish family. As a child, Bettelheim is entrusted to a wet-nurse, but when he falls ill, his mother takes care of him. His childhood is happy at first, spent in a loving and numerous family (Bettelheim has fourteen aunts and uncles). At age four he contracts life-threatening dysentery. His is influenced by fairy tales:
The literature, which exerted a strong influence on me at the very beginning, were fairy tales, the first my mother told me, and I read itself. But I can not remember exactly whether these stories had a formative force for me. However, this must have been the case, because otherwise I would not have tried, aged over the years, to understand their psychological meaning for children. (…) How and in what way tales for me were at that time so important, I can not fathom today, but I’m pretty sure the reason being that they were telling me mainly from my mother
His father runs a wood factory, but loses a large part of its assets in the First World War, and has a stroke in 1918. He remembers his father as a weak, broken man who was no longer able to take responsibility for his family in times of change. The relationship between his mother and father deteriorates when she discovers that her husband has caught syphilis from a prostitute. His father becomes anxious and depressed, because he is suffering from many other diseases.