Margera was born in West Chester, Pennsylvania to Phil and April Margera. He is also the younger brother of Jess Margera and nephew of Vincent Margera. His grandfather nicknamed him "Bam" at the age of three after his habit of running into walls.He attended East High School and cites friend Chris Raab as his only reason for attending high school, and dropped out after Raab got expelled for smearing feces on a locker. He later received his GED at the insistence of his parents.

Margera is a member of Team Element, the demonstration team for Element Skateboards. He is also sponsored by Destructo Trucks, Speed Metal Bearings, Electric Visual, and Fairman's Skateshop. Although Margera does not compete at the higher levels of skateboarding, his large sponsorship packages assure him of "pro" status.

Margera currently resides in "Castle Bam", a large house in Wawaset, PA. The house has a gothic theme, a skatepark in the driveway and is situated on 14 acres (57,000 m2) of land. In January 2007, Margera built a ramp in his backyard, near the old casino seen in Viva La Bam. The ramp itself caused trouble with the township.Margera's parents and select members of the CKY Crew lived in the house while shooting Viva La Bam, with Margera's uncle residing in a house on the property.

In an October 24, 2007 interview with the Cleveland Free Times, Margera stated that although he had completed paperwork that would legally change his first name to Bam, he was "still debating" filing it after a conversation with his father.