The crises and unrest of the late fifteenth century would have been far from the minds of Hans and Margaret Luther on the evening in 1483 when their son was born. The church, although under criticism, still dominated the lives of peasants like the Luthers. The first task of Hans Luther upon the birth of his son would have been arranging for the baby's baptism. So, as soon as it was practical, Hans brought the boy to the local parish priest and presented him for baptism. Because the day of the baby's baptism—November 11—was the feast day of St. Martin of Tours, the baby was named Martin.

Hans and Margaret were peasants, and the young Martin grew up among the peasantry—a fact about which he later boasted. The Luthers were not destitute, however. Hans' father (and Martin's grandfather), Heine Luther, had been a moderately prosperous independent farmer in the village of Möhra. According to local custom, the youngest son inherited the entire family property. Since Hans was an older son, he wasn't able to inherit the family farm. Instead, he sought his fortunes in the copper mines of the nearby county of Mansfield. He first tried the mines in Eisleben, the largest city in the area. It was here that Martin was born. Hans was unable to advance in Eisleben, however, and about a year after Martin's birth, Hans moved his growing family to the smaller town of Mansfield, ten miles away. At Mansfield, Hans began to prosper in the mining industry. By 1491, he had become a partner in a mining company that ultimately would operate at least six copper mines and two copper smelters, a position that gave him a reasonable income and good opportunities for advancement. Young Martin may have experienced some moderate scarcity in his early youth, as Hans was beginning to make his way in the mining industry, but it seems unlikely that he would have ever known true poverty—at least personally.

Hans' wife, the former Margaret Lindemann, was a young woman from an established middle-class merchant family in Eisenach. Margaret's relatives included doctors, lawyers, university professors, and civil servants. Margaret's relatives were probably instrumental in helping Hans Luther secure the credit he would have needed to purchase his ownership stake in the copper mines.