He started racing quarter-midgets when he was 7 and won a national championship at nine, before moving onto the the local short tracks in a stock car as a teenager. Driving on both dirt and asphalt, he won track championships in his hometown, in Houston, and in San Antonio from 1975 to 1977. During this time he also met Louisiana businessman Billy Hagan. Hagan offered Labonte a job on his Winston Cup team along with the promise to drive five races that year.