Rabbitt was born to Irish immigrants Mae (nee Joyce) and Thomas Michael Rabbitt in Brooklyn, New York in 1941, and was raised in the nearby community of East Orange, New Jersey. His father was an oil-refinery refrigeration worker, and a skilled fiddle and accordion player, who often entertained in local New York City dance halls. By age twelve Rabbitt was a proficient guitar player, having been taught by his scoutmaster, Bob Scwickrath. During his childhood Rabbitt became a self-proclaimed "walking encyclopedia of country music".

Rabbitt was employed as a mental hospital attendant in the late 1950s but, like his father, he fulfilled his love of music by performing at the Six Steps Down club in his hometown. He later won a talent contest and was given an hour of Saturday night radio show time to broadcast a live performance from a bar in Paterson, New Jersey. In 1964, he signed his first record deal with 20th Century Records and released the singles, "Next to the Note" and "Six Nights and Seven Days". Four years later, with $1,000.00 to his name, Rabbitt moved to Nashville where he began his career as a songwriter. During his first night in the town, Rabbitt wrote "Working My Way Up to the Bottom", which Roy Drusky recorded in 1968. To support himself, Rabbitt worked as a truck driver, soda jerk and fruit picker while in Nashville. He was ultimately hired as a staff writer for the Hill & Range Publishing Company and received a salary of $37.50 per week. As a young songwriter, Rabbitt socialized with other aspiring writers at Wally's Clubhouse, a bar in Nashville; he said that he and the other patrons had "no place else to go." Rabbitt became successful as a songwriter in 1969 when Elvis Presley recorded his song "Kentucky Rain". The song went gold and cast Rabbitt as one of Nashville's leading young songwriters. While eating Cap'n Crunch, he penned "Pure Love", which Ronnie Milsap rode to No. 1 in 1974. This song led to a contract offer from Elektra Records. Rabbitt signed with Elektra Records in 1975. His first single under that label, "You Get To Me" made the top 40 that year, and two songs in 1975, "Forgive and Forget" and "I Should Have Married You" nearly made the top 10. These three songs along with a recording of "Pure Love" were included on Rabbitt's self-named debut album in 1975. In 1976 his critically acclaimed Rocky Mountain Music album was released, which handed Rabbitt his first No. 1 country hit with the track "Drinkin' My Baby (Off My Mind)". In 1977 his third album, Rabbitt was released, which made the top 5 on Country Albums chart. Also in 1977 the Academy of Country Music named Rabbitt "Top New Male Vocalist of the Year". By that time he had a good reputation in Nashville, and was being compared by critics to singer Kris Kristofferson. In 1977, at Knott's Berry Farm, Eddie Rabbitt appeared at the CMA and sang several of his songs from the album Rocky Mountain Music. He won the award of Top New Male Vocalist of the Year.

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