Reed was born Donna Belle Mullenger on a farm near Denison, Iowa, the daughter of Hazel Jane (née Shives; 1899–1975) and William Richard Mullenger (1893–1981). The eldest of five children, she was raised as a Methodist. After graduating from Denison High School, Reed planned to become a teacher, but was unable to pay for college. She decided to move to California to attend Los Angeles City College on the advice of her aunt. While attending college, she performed in various stage productions but had no plans to become an actress. After receiving several offers to screen test for studios, Reed eventually signed with MGM, but insisted on finishing her education first.