Arnold Potts was born on 16 September 1896 at Peel on the Isle of Man to William, a schoolmaster, and Mary Potts. In 1904, at the age of eight, Potts' family emigrated to Western Australia and he attended Cottesloe State School before progressing on to Guilford Grammar School. During his formative years he was a keen sportsman, even despite his short stature, representing Guilford in rowing, football, shooting and athletics.