Broschi was born in Andria (in what is now Apulia) into a family of musicians. As recorded in the baptismal register of the church of S. Nicola in Andria, his father Salvatore was a composer and maestro di cappella of the city's cathedral, and his mother, Caterina Barrese, a citizen of Naples. The Duke of Andria, Fabrizio Carafa, a member of one of the most prestigious families of the Neapolitan nobility, honoured Maestro Broschi by taking a leading part in the baptism of his second son, who was christened Carlo Maria Michelangelo Nicola (in later life, Farinelli wrote: "Il Duca d'Andria mi tenne al fonte" - "the Duke of Andria held me at the font"). In 1706 Salvatore also took up the non-musical post of governor of the town of Maratea (on the western coast of what is now Basilicata), and in 1709 that of Terlizzi (some twenty miles south-east of Andria). Unlike many castrati, who came from poor families, Farinelli was well-to-do, and was related to minor nobility on both sides of the family.

From 1707, the Broschi family lived in the coastal city of Barletta, a few miles from Andria, but at the end of 1711, they made the much longer move to the capital city of Naples, where, in 1712 Carlo's elder brother Riccardo was enrolled at the Conservatory of S. Maria di Loreto, specialising in composition. Carlo had already showed talent as a boy singer, and was now introduced to the most famous singing-teacher in Naples, Nicola Porpora. Already a successful opera composer, in 1715 Porpora was appointed maestro at the Conservatory of S. Onofrio, where his pupils included such well-known castrati as Giuseppe Appiani, Felice Salimbeni, and Gaetano Majorano (known as Caffarelli), as well as distinguished female singers such as Regina Mingotti and Vittoria Tesi; Farinelli may well have studied with him privately.

Salvatore Broschi died unexpectedly on 4 November 1717, aged only 36, and it seems likely that the consequent loss of economic security for the whole family provoked the decision, presumably taken by Riccardo, for Carlo to be castrated. As was often the case, an excuse had to be found for this illegal operation, and in Carlo's case it was said to have been necessitated by a fall from a horse. Under Porpora's tuition, his singing progressed rapidly, and at the age of fifteen he made his debut a serenata by his master entitled Angelica e Medoro. The text of this work was the first by the soon-to-be-famous Pietro Trapassi (known as Metastasio), who became a lifelong friend of the singer - Farinelli remarked that the two of them had made their debuts on the same day, and each frequently referred to the other as his caro gemello ("dear twin"). The derivation of Broschi's stage name is not certain, but it was possibly from two rich Neapolitan lawyers, the brothers Farina, who may have sponsored his studies.

Farinelli quickly became famous throughout Italy as il ragazzo ("the boy"). In 1722, he first sang in Rome in Porpora's Eumene and Flavio Anicio Olibrio, as well as taking the female lead in Sofonisba by Luc'Antonio Predieri - it was common practice for young castrati to appear en travesti. All these appearances were greeted with huge public enthusiasm, and an almost legendary story arose that he had to perform an aria with trumpet obbligato, which evolved into a contest between singer and trumpeter. Farinelli surpassed the trumpet player so much in technique and ornamentation that he "was at last silenced only by the acclamations of the audience" (to quote the music historian Charles Burney – this account cannot be verified one way or the other, since no surviving work which Farinelli is known to have performed contains an aria for soprano with trumpet obbligato).

In 1724, Farinelli made his first appearance in Vienna, at the invitation of Pio di Savoia, director of the Imperial Theatre. He spent the following season in Naples. In 1726, he also visited Parma and Milan, where Johann Joachim Quantz heard him and commented: "Farinelli had a penetrating, full, rich, bright and well-modulated soprano voice, with a range at that time from the A below middle C to the D two octaves above middle C. ... His intonation was pure, his trill beautiful, his breath control extraordinary and his throat very agile, so that he performed the widest intervals quickly and with the greatest ease and certainty. Passagework and all kinds of melismas were of no difficulty to him. In the invention of free ornamentation in adagio he was very fertile." Quantz is certainly accurate in describing Farinelli as a soprano, since arias in his repertoire contained the highest notes customarily employed by that voice during his lifetime: "Fremano l'onde" in Pietro Torri's opera Nicomede (1728) and "Troverai se a me ti fidi" in Niccolò Conforto's La Pesca (1737) both contain sustained C6. However, the singer also possessed an extraordinarily extensive low range: "Navigante che non spera" in Leonardo Vinci's opera Il Medo (1728) takes him into what might well be described as the alien territory of C3, where a tenor would be more "at home".

Farinelli sang at Bologna in 1727, where he met the famous castrato Antonio Bernacchi, twenty years his senior. In a duet in Orlandini's Antigona, Farinelli showed off all the beauties of his voice and refinements of his style, executing a number of passages of great virtuosity, which were rewarded with tumultuous applause. Undaunted, Bernacchi repeated every trill, roulade, and cadenza of his young rival, but performing all of them even more exquisitely, and adding variations of his own. Farinelli, admitting defeat, entreated Bernacchi to give him instruction in grazie sopraffine ("ultra-refined graces"); Bernacchi agreed.

In 1728, as well as performing in Torri's Nicomede at the Munich court, Farinelli performed another concert before the Emperor in Vienna. In 1729, during the Carnival season in Venice, he sang in two works by Metastasio: as Arbace in Metastasio's Catone in Utica (music by Leonardo Leo) and Mirteo in Semiramide Riconosciuta (music by Porpora). During this period he could really do no wrong - loaded with riches and honours, he was so famous and so formidable as a performer that his rival and friend, the castrato Gioacchino Conti ("Gizziello") is said to have fainted away from sheer despondency on hearing him sing. George Frideric Handel was also keen to engage Farinelli for his company in London, and while in Venice in January 1730, tried unsuccessfully to meet him.

In 1731, Farinelli visited Vienna for a third time. There he was received by the Holy Roman Emperor, Charles VI, on whose advice, according to the singer's first biographer, Giovenale Sacchi, he modified his style, singing more simply and emotionally. After further seasons in Italy, and another visit to Vienna, during which he sang in oratorios in the Imperial chapel, Farinelli came to London in 1734.

In London the previous year, Senesino, a singer who had been a part of Handel's "Second Academy" which performed at the King's Theatre, Haymarket, quarrelled with Handel and established a rival company, Opera of the Nobility, operating from a theatre in Lincoln's Inn Fields. This company had Porpora as composer and Senesino as principal singer, but had not been a success during its first season of 1733-34. Farinelli, Porpora's most famous pupil, joined the company and made it financially solvent.

He first appeared in Artaserse, a pasticcio with music by his brother Riccardo and by Johann Adolph Hasse. He sang the memorable arias "Per questo dolce amplesso" (music by Hasse) and "Son qual nave" (music by Broschi), while Senesino sang "Pallido il sole" (music by Hasse). Of "Per questo dolce amplesso", Charles Burney reports: "Senesino had the part of a furious tyrant, and Farinelli that of an unfortunate hero in chains; but in the course of the first air, the captive so softened the heart of the tyrant, that Senesino, forgetting his stage-character, ran to Farinelli and embraced him in his own." "Son qual nave", on the other hand, was composed by Riccardo Broschi as a special showpiece for his brother's virtuosic skills. Burney described it thus: "The first note he sung was taken with such delicacy, swelled by minute degrees to such an amazing volume, and afterwards diminished in the same manner to a mere point, that it was applauded for full five minutes. After this he set off with such brilliancy and rapidity of execution, that it was difficult for the violins of those days to keep pace with him."