Anderson was born in Ladysmith, British Columbia, the daughter of Barry Anderson, a furnace repairman, and Carol (née Grosco), a waitress. Her great-grandfather, Juho Hyytiäinen, was Finnish, a native of Saarijärvi, and left Finland in 1908, changing his name to Anderson when he arrived as an immigrant. Anderson also has Russian ancestry on her mother's side.

After graduating from Highland Secondary School in 1985, Anderson moved to Vancouver and worked as a fitness instructor. During the summer of 1989, Anderson went with her friends to a BC Lions game at BC Place; during the game she was shown on the stadium screen wearing a Labatt's t-shirt, causing the crowd to cheer for the 21-year-old Anderson. She was taken down to the field to receive an ovation from the crowd. Labatt's had the opportunity to hire Canadian model Pamela Anderson as a Labatt's Blue Zone Girl after she was picked out of the crowd by a TV camera man at a BC Lions football game wearing a Blue Zone crop-top. Photographer and boyfriend Dan Ilicic produced the Blue Zone Girl poster on his own. In October 1989 she appeared as the cover girl on Playboy magazine. At this stage in her modeling career, she had decided to live in Los Angeles to further pursue her career ambitions. She became a centerfold for Playboy when the magazine chose her to be their Playmate of the Month for their February 1990 issue. She then chose to get breast implants. Anderson has since appeared in Playboy several times in the 1990s and 2000s.