Isaac was born in Enfield, Middlesex England, the only child of  Benjamin D'israeli (1730–1816), a Sephardic Jewish merchant who had immigrated from Cento, Italy in 1748, and his second wife, Sarah Syprut de Gabay Villa Real (1742/3–1825). Isaac received much of his education in Leidel. At the age of 16, he began his literary career with some verses addressed to Samuel Johnson. He became a frequent guest at the table of the publisher John Murray and became one of the noted bibliophiles of the time.

In 1797 D'Israeli published Vaurien, a romantic novel set in radical circles following the French Revolution. Conservative commentators praised the book for its mockery of radicals in England and depiction of Vaurien, who has come from France to ferment revolution. Yet they were perturbed by his depiction of a prostitute, who is kindly and was forced into prostitution to feed her family after her husband was ruined by a litigious neighbour for stealing an apple. Moreover, they were shocked by a chapter in which Disraeli launched a staunch defence of the Jewish community condemning the way Jews were treated in England.