Petty was born October 20, 1950, in Gainesville, Florida, the first of two sons of Kitty (Katherine) Petty, a local tax office worker, and Earl Petty, who was a traveling salesman. He had a brother, Bruce, who was seven years younger. His interest in rock and roll music began at age ten when he met Elvis Presley. In the summer of 1961, his uncle was working on the set of Presley's film Follow That Dream, in nearby Ocala, and invited Petty to watch the shoot. He instantly became a Presley fan, and when he returned that Saturday, he was greeted by his friend Keith Harben, and soon traded his Wham-O slingshot for a collection of Elvis 45's. Of that meeting with Presley, Petty said, "Elvis glowed." In a 2006 interview, Petty said he knew he wanted to be in a band the moment he saw the Beatles on The Ed Sullivan Show. "The minute I saw the Beatles on the Ed Sullivan Show—and it's true of thousands of guys—there was the way out. There was the way to do it. You get your friends and you're a self-contained unit. And you make the music. And it looked like so much fun. It was something I identified with. I had never been hugely into sports. ... I had been a big fan of Elvis. But I really saw in the Beatles that here's something I could do. I knew I could do it. It wasn't long before there were groups springing up in garages all over the place." He dropped out of high school at age 17 to play bass with his newly formed band.
In 2006, Tom Petty and the Heartbreakers headlined the fifth annual Bonnaroo Music and Arts Festival as part of their "30th Anniversary Tour". Special guests included Stevie Nicks, Pearl Jam, the Allman Brothers Band, Trey Anastasio, the Derek Trucks Band, and the Black Crowes. Nicks joined Petty and the Heartbreakers on stage for "a selection of songs" including "Stop Draggin' My Heart Around".
In July 2006, Petty released a solo album titled Highway Companion, which included the hit "Saving Grace". It debuted at number four on the Billboard 200, which was Petty's highest chart position since the introduction of the Nielsen SoundScan system for tracking album sales in 1991. Highway Companion was briefly promoted on the tour with the Heartbreakers in 2006, with performances of "Saving Grace", "Square One", "Down South" and "Flirting with Time".
Some have claimed that the Red Hot Chili Peppers single "Dani California", released in May 2006, is very similar to Petty's "Mary Jane's Last Dance". Petty told Rolling Stone Magazine, "I seriously doubt that there is any negative intent there. And a lot of rock 'n' roll songs sound alike. Ask Chuck Berry. The Strokes took 'American Girl' for their song 'Last Nite', and I saw an interview with them where they actually admitted it. That made me laugh out loud. I was like, 'OK, good for you' ... If someone took my song note for note and stole it maliciously, then maybe [I'd sue]. But I don't believe in lawsuits much. I think there are enough frivolous lawsuits in this country without people fighting over pop songs."
In September 2006, Tom Petty and the Heartbreakers received the keys to the city of Gainesville, Florida, where he and his bandmates either lived or grew up.