 Peter Taylor was born on 2 July 1928, one of eight children raised in The Meadows, Nottingham, to Tom and Jenny Taylor, an engineer and housewife respectively. He met his future wife Lily Thorpe at the age of 14, who persuaded him to play for her father's team, local non-league side Christchurch. He later moved on to play for Mapperley Methodists, before he was spotted by Nottingham Forest, and signed to their youth team, the Forest Colts. He made his first team debut for the club as an amateur in a wartime fixture against local rivals Notts County at Meadow Lane in 1944, at the age of 16.
