Reid was born in Bromley, London, to Lesley Hughes, who was of native English descent, and Colvin Robin Reid, a man of mixed race whose father was a Jamaican immigrant. When Reid was born, his father, a career criminal, was in prison for stealing a car. Reid attended Thomas Tallis School in Kidbrooke, leaving at age 16 and becoming a graffiti writer who was in and out of jail. He began writing graffiti under the name "Enrol" as part of the FRF crew, and ultimately accumulated more than 10 convictions for crimes against persons and property. He served sentences at Feltham Young Offenders Institution and at Maidstone Prison.

The next time Reid was incarcerated (in 1992 for various street robberies for 3 years), he converted to Islam.

Upon his release from prison in 1995, he joined the Brixton Mosque. He later began attending the Finsbury Park Mosque in North London, headed at that time by the anti-American cleric Abu Hamza al-Masri and described as "the heart of the extremist Islamic culture" in Britain. By 1998 Reid was voicing extremist views. At the Finsbury Park Mosque he fell under the sway of "terrorist talent spotters and handlers" allied with al-Qaeda, including Djamal Beghal, one of the leaders of the foiled plan for a 2001 suicide bombing of the American Embassy in Paris.

He spent 1999 and 2000 in Pakistan and trained at a terrorist camp in Afghanistan, according to several informants. He may also have attended an anti-American religious training centre in Lahore as a follower of Mubarak Ali Gilani.

After his return to Britain, Reid worked to obtain duplicate passports from British government consulates abroad. He lived and travelled in several places in Europe, communicating via an address in Peshawar, Pakistan. In July 2001, Reid flew to Israel.

Reid and Saajid Badat, another British man preparing as a terrorist, returned to Pakistan in November 2001, and reportedly travelled overland to Afghanistan. They were given "shoe bombs", casual footwear adapted to be covertly smuggled onto aircraft before being used to destroy them. Later forensic analysis of both bombs showed that they contained the same plastic explosive and that the respective lengths of detonator cord had come from the same batch: the cut mark on Badat's cord exactly matched that on Reid's. The pair returned separately to the United Kingdom in early December 2001. Reid went to Belgium for 10 days before catching a train to Paris on 16 December.

On 21 December 2001, Reid attempted to board a flight from Paris to Miami, Florida. His boarding was delayed because his dishevelled physical appearance aroused the suspicions of the airline passenger screeners. In addition, Reid did not answer all of their questions, and had not checked any luggage for the transatlantic flight. Additional screening by the French National Police resulted in Reid's being re-issued a ticket for a flight on the following day. He returned to the Paris airport on 22 December 2001, and boarded American Airlines Flight 63 from Paris to Miami, wearing his special shoes packed with plastic explosives in their hollowed-out bottoms.