Terrell was the older of two siblings. According to the Unsung documentary, her sister Ludie said her parents thought Terrell would be a boy &, therefore, she would be named after her father. When Terrell was born, the parents settled on the name Thomasina,
nicknaming her Tommie, Terrell later changed it to Tammy, after seeing the film Tammy & the Bachelor & hearing its theme song, Tammy, at the age of 12. According to Ludie’s book My Sister Tommie, The Real Tammi Terrell, Terrell was raped by three boys at the age of 11. Around this time, she started to have migraine headaches. While it was not thought to be of significance at the time, family members later stated that these headaches might have been related to her later diagnosis of brain cancer. Terrell attended Germantown High School in Philadelphia.