Born at Penshurst Place, Kent, he was the eldest son of Sir Henry Sidney and Lady Mary Dudley. His mother was the eldest daughter of John Dudley, 1st Duke of Northumberland, and the sister of Robert Dudley, 1st Earl of Leicester. His younger brother, Robert was a statesman and patron of the arts, and was created Earl of Leicester in 1618. His younger sister, Mary, married Henry Herbert, 2nd Earl of Pembroke and was a writer, translator and literary patron. Sidney dedicated his longest work, the Arcadia, to her. After her brother's death, Mary reworked the Arcadia, which became known as The Countess of Pembroke's Arcadia.
Philip was educated at Shrewsbury School and Christ Church, Oxford. In 1572 he was elected to Parliament as Member of Parliament for Shrewsbury and in the same year travelled to France as part of the embassy to negotiate a marriage between Elizabeth I and the Duc D'Alençon. He spent the next several years in mainland Europe, moving through Germany, Italy, Poland, the Kingdom of Hungary and Austria. On these travels, he met a number of prominent European intellectuals and politicians. During a 1577 diplomatic visit to Prague, Sidney secretly visited the exiled Jesuit priest Edmund Campion.