Bruce Lee was born on 27 November 1940, at the Chinese Hospital, in San Franciscos Chinatown. According to the Chinese zodiac, Lee was born in both the hour and the year of the Dragon, which according to tradition is a strong and fortuitous omen.

Bruces father, Lee Hoi-chuen,  was Han Chinese, and his mother, Grace Ho  was half-Chinese and half-Caucasian. Specifically, Grace Ho was purportedly a half-German Catholic,[15]and may have been adopted. Grace Ho was the daughter of Ho Kom-tong (Ho Gumtong,) and the niece of Sir Robert Ho-tung, both notable Hong Kong businessmen and philanthropists.Bruce was the fourth child of five children: Phoebe Lee  Agnes Lee Peter Lee , and Robert Lee  Lee and his parents returned to Hong Kong when he was three months old.

Lee began teaching martial arts in the United States in 1959. He called what he taught Jun Fan Gung Fu (literally Bruce Lees Kung Fu). It was basically his approach to Wing Chun. Lee taught friends he met in Seattle, starting with Judo practitioner Jesse Glover, who continued to teach some of Lees early techniques. Taky Kimura became Lees first Assistant Instructor and continued to teach his art and philosophy after Lees death.Lee opened his first martial arts school, named the Lee Jun Fan Gung Fu Institute, in Seattle.

Lee dropped out of college in the spring of 1964 and moved to Oakland to live with James Yimm Lee  James Lee was twenty years senior to Bruce Lee and a well known Chinese martial artist in the area. Together, they founded the second Jun Fan martial art studio in Oakland. James Lee was also responsible for introducing Bruce Lee to Ed Parker, American martial artist, and organizer of the Long Beach International Karate Championships at which Bruce Lee was later "discovered" by Hollywood.

At the invitation of Ed Parker, Lee appeared in the 1964 Long Beach International Karate Championships and performed repetitions of two-finger push-ups (using the thumb and the index finger of one hand) with feet at approximately a shoulder-width apart. In the same Long Beach event he also performed the "One inch punch",the description of which is as follows: Lee stood upright, his right foot forward with knees bent slightly, in front of a standing, stationary partner. Lees right arm was partly extended and his right fist approximately an inch away from the partners chest. Without retracting his right arm, Lee then forcibly delivered the punch to his partner while largely maintaining his posture, sending the partner backwards and falling into a chair said to be placed behind the partner to prevent injury, though his partners momentum soon caused him to fall to the floor. His volunteer was Bob Baker of Stockton, California. "I told Bruce not to do this type of demonstration again", Baker recalled. "When he punched me that last time, I had to stay home from work because the pain in my chest was unbearable".

It was at the 1964 championships where Lee first met Taekwondo master Jhoon Goo Rhee. The two developed a friendship – a relationship from which they benefited as martial artists. Rhee taught Lee the side kick in detail, and Lee taught Rhee the "non-telegraphic" punch.

Lee appeared at the 1967 Long Beach International Karate Championships and performed various demonstrations, including the famous "unstoppable punch" against USKA world Karate champion Vic Moore.Lee told Moore that he was going to throw a straight punch to the face, and all he had to do was to try to block it. Lee took several steps back and asked if Moore was ready, when Moore nodded in affirmation, Lee glided towards him until he was within striking range. He then threw a straight punch directly at Moores face, and stopped before impact. In eight attempts, Moore failed to block any of the punches.

In Oakland, California in 1964 at Chinatown, Lee had a controversial private match with Wong Jack Man, a direct student of Ma Kin Fung known for his mastery of Xingyiquan, Northern Shaolin, and Tai chi chuan. According to Lee, the Chinese community issued an ultimatum to him to stop teaching non-Chinese. When he refused to comply, he was challenged to a combat match with Wong. The arrangement was that if Lee lost, he would have to shut down his school; while if he won, then Lee would be free to teach Caucasians or anyone else. Wong denied this, stating that he requested to fight Lee after Lee issued an open challenge during one of Lees demonstrations at a Chinatown theatre, and that Wong himself did not discriminate against Caucasians or other non-Chinese. Lee commented, "That paper had all the names of the sifu from Chinatown, but they dont scare me".

Individuals known to have witnessed the match included Cadwell, James Lee (Bruce Lees associate, no relation), and William Chen, a teacher of Tai chi chuan. Wong and witness William Chen stated that the fight lasted an unusually long 20–25 minutes.According to Bruce Lee, Linda Lee Cadwell, and James Yimm Lee, the fight lasted 3 minutes with a decisive victory for Lee. "The fight ensued, it was a no-holds-barred fight, it took three minutes. Bruce got this guy down to the ground and said do you give up? and the man said he gave up" – Linda Lee Cadwell.

Wong Jack Man published his own account of the battle in the Chinese Pacific Weekly, a Chinese-language newspaper in San Francisco, which contained another challenge to Lee for a public rematch. Lee had no reciprocation to Wongs article, nor were there any further public announcements by either, but Lee had continued to teach Caucasians.