Born in Petersburg, Virginia, Cotten worked as an advertising agent after graduating from the Washington, D.C., Hickman School, where he studied acting. His work as a theatre critic inspired him to become more involved in theatre productions, first in Virginia, and later in New York. Cotten made his Broadway debut in 1930, and soon befriended up-and-coming actor/director/producer Orson Welles. In 1937 he joined Welles' Mercury Theatre Company, with which he starred in productions of Julius Caesar and Shoemaker's Holiday.