Director, producer and screenwriter Alexander Payne was born in Omaha, Nebraska. His parents, Peggy (Constantine) and George Payne, ran a Greek restaurant. His father is of Greek and German ancestry, and his mother is of Greek descent; the family name was originally Papadopoulos. He is the youngest of three brothers.

Alexander attended Stanford University, where he majored in Spanish and History. He then went on to study film at UCLA Film School. His university thesis film was screened at the Sundance film festival, which led to him being backed by Miramax to write and direct Citizen Ruth (1996). Payne prefers to have control over his movies, from scripts to cast.