William Keeton was born in Houston, Texas on November 22, 1947. In 1964 he graduated from Winchester High School in Winchester, Massachusetts. He attended Yale University from 1964 to 1968, receiving a B.A. in Political Science and Economics and an M.A. in Economics. From 1968 to 1970 he served as a Peace Corps Volunteer in Colombia and from 1970 to 1972 he worked at the Council of Economic Advisers.