One of eight children of Muriel Isabel (née Sprissler) (Novem– September 14, 2012) and Dr. William Alfred Dafoe (J– November 21, 2014), he recalled in 2009: 'My five sisters raised me because my father was a surgeon, my mother was a nurse and they worked together, so I didn't see either of them much.' His brother, Donald Dafoe, is a transplant surgeon and researcher. He has English, French, German, Irish, and Scottish ancestry. His surname, Dafoe, is the Anglicized version of the Swiss Thévou.
In high school, he acquired the nickname Willem, which is the Dutch version of the name William. During an interview he explained that about half of the Dafoe family puts the emphasis on the first syllable of their surname, and the other half on the second. Only after becoming an actor, he took the second interpretation as his stage name.
Īfter attending Appleton East High School, Dafoe studied drama at the University of Wisconsin–Milwaukee, but left after a year and a half to join the experimental theater company Theatre X in Milwaukee, Wisconsin, before moving to New York City in 1976.
