Newton-John was born on 26 September 1948 in Cambridge, United Kingdom, to Welshman Brinley “Bryn” Newton-John (1914–1992) and Irene Helene (née Born; 1914–2003). Her Jewish maternal grandfather, the Nobel Prize–winning physicist Max Born, fled with his wife and children to Britain from Germany before World War II to escape the Nazi regime. Newton-John’s maternal grandmother was of paternal Jewish ancestry as well; through her, she was a third cousin of comedian Ben Elton. Her maternal great-grandfather was the jurist Victor Ehrenberg and her matrilineal great-grandmother’s father was the jurist Rudolf von Jhering.
Newton-John’s father was an MI5 officer on the Enigma project at Bletchley Park who took Rudolf Hess into custody during World War II. After the war, he became the headmaster of the Cambridgeshire High School for Boys and was in this position when Olivia was born.