Rory Gallagher was born in Ballyshannon, County Donegal in 1948. His father Daniel was employed by the Irish Electricity Supply Board, who were constructing a hydro-electric power plant on the Erne River above the town. The family moved, first to Derry City, where his younger brother Dónal was born in 1949. His mother, Monica, and the two boys then moved to Cork, where the brothers were raised. Rory attended North Monastery School. Daniel Gallagher had played the accordion and sang with the Tír Chonaill Céilí Band whilst in Donegal; their mother Monica was a singer and acted with the Abbey Players in The Theatre in Ballyshannon where Monica once acted is now called the Rory Gallagher Theatre.
Both sons were musically inclined and encouraged by their parents. At age nine, Gallagher received his first guitar from them. He built on his burgeoning ability on ukulele in teaching himself to play the guitar and perform at minor functions. After winning a talent contest when he was twelve, Gallagher began performing in his adolescence with both his acoustic guitar, and an electric guitar he bought with his prize money. However, it was his purchase three years later of a 1961 for £100 that became his primary instrument and most associated with him for the span of his lifetime
Gallagher was initially attracted to after hearing on the radio. Donegan frequently covered blues and folk performers from the United States. He relied entirely on radio programs and television. Occasionally, the BBC would play some blues numbers, and he slowly found some song books for guitar, where he found the names of the actual composers of blues pieces. While still in school, playing songs by Buddy Holly and Eddie Cochran, he discovered his greatest influence in Muddy Waters. He began experimenting with folk, blues, and rock music. Unable to find or afford record albums.