La Barre was born in Uniontown, Pennsylvania, the son of a banker. After graduating from Princeton University in 1933 he began field work with the Yale Institute of Human Relations. During this period, La Barre worked with one of his lifelong academic associates, Richard Evans Schultes of Harvard University. Travelling and sleeping in Schultes' old car, they traveled extensively throughout Oklahoma on their quest to study the peyote cult of the Plains Indians. La Barre received his doctorate from Yale in 1937 with a thesis on peyote religion. In a 1961 article, La Barre wrote that "It was [La Barre's teacher at Yale] Edward Sapir, more than any other person, who first effectively imported psychoanalysis into the body of American anthropology...At a time when the official anthropological journals were systematically ignoring psychoanalysis and the prevailing climate of opinion was chilly if not hostile, Sapir was giving his students as required reading the works of Abraham, Jones, Ferenczi and other classic writers." In the 1970s, La Barre taught those same classic psychoanalytic works to Duke medical students.