James Anthony Happ is the youngest of three Happ children; the other two are older sisters. He was born in Peru, Illinois, and attended St. Bede Academy, where he played baseball and basketball. He was a four-letter winner at the school in both sports. In his last year of high school, he was county Athlete of the year.
Happ played baseball for the Northwest Wildcats while attending Northwestern University. He made the All-Big ten conference in his first three years. In his last year, he compiled a 16-11 record with an ERA of 2.88 with 251 strikeouts compared to ninety walks.