Larsen was born in Tilsted, near Thisted in Denmark and was educated at Aalborg Cathedral School. In January 1942 Larsen contracted a number of childhood diseases. Although none had any permanent effects, it was during this period that Larsen discovered chess. He went on to represent Denmark twice in the World Junior Championship, in 1951 at Birmingham (placing fifth) and in 1953 at Copenhagen (placing eighth). He started playing seriously at the age of 17 when he moved to Copenhagen to study civil engineering, but he never graduated choosing instead to play chess professionally. He became an International Master at the age of 19 in 1954, from his bronze-medal performance on board one at the Amsterdam Olympiad. He won his first of six Danish Championships in 1954, repeating this feat in 1955, 1956, 1959, 1963 and 1964.