Al-Walid was born in 1957 to Prince Talal bin Abdulaziz, one of the many sons of the late King Abdulaziz, and Mona al-Solh, the daughter of Lebanon's first post independence prime minister, Riad al-Solh.
During the 1950s, Al-Walid's father emerged as the leader of a group of liberal Princes who championed political reform in the Kingdom, initially calling itself “Young Najd” (after the central region of Saudi Arabia where the Al-Saud family originated) and later known as the “Free Princes” (designed to imply a parallel with the Free Officers of Gamal abd al-Nasser in Egypt). By the end of the decade, the Arab media was rife with reports of a new constitution drafted by Prince Talal which would have strengthened the power of the cabinet vis-a-vis the king and established a partially-elected shura (consultative) council. However, King Saud rejected the proposals and the Saudi clerical establishment issued a fatwa condemning them as a violation of Islamic law. In 1961, the government withdrew Talal's passport and began attempting to silence him, prompting him to leave for exile in Egypt the following year. During his stay in Cairo, he declared himself socialist and broadcast anti-Saudi radio propaganda, earning the nickname “the Red Prince.”