John Morris Sheppard was born in Morris County, Texas, the oldest of seven children, to lawyer and later judge and United States Congressman, John Levi Sheppard and his wife Margaret Alice (Eddins) Sheppard.
Sheppard enrolled at the University of Texas at Austin in 1891 and received his B.A. degree from there in 1895, as well as his LL.B. from University of Texas School of Law in 1897. It was while enrolled at UT-Austin Law School that Sheppard became a member of the Methodist Church. He was also a close friend and classmate of future Governor of Texas Pat Neff and future U. S. Senator Tom Connally while at the University of Texas School of Law. In 1898, he received his LL.M. from Yale University.