Granado was born on August 8, 1922, in Hernando, Córdoba to Dionisio T. Granado (a Spanish clerical employee of an Argentine railway company) and Adelina Jiménez Romero. In 1930, after José Félix Uriburu toppled the progressive government of Hipólito Yrigoyen, Granado's family relocated to Villa Constitución, province of Santa Fé, due to his father's position as a militant trade unionist. In 1931, Granado was sent to live with his grandparents in Córdoba and in 1940, he attended the University of Córdoba, where he studied chemistry, pharmacy and biochemistry.
In his best-selling biography entitled Che Guevara: A Revolutionary Life, Jon Lee Anderson describes Granado at this time as "barely five feet tall and had a huge beaked nose, but he sported a barrel chest and a footballer's sturdy bowed legs; he also possessed a good sense of humor and a taste for wine, girls, literature and rugby."
In 1943, Granado took part in the political protests against General Juan Perón and was jailed for one year. During this time he came across Ernesto Guevara (who was not yet nicknamed "Che") after Guevara's family moved to Córdoba in the hope that the mountain air would ameliorate Ernesto's asthma. The two first met when Guevara accompanied Granado's brother Tomás (whom he went to school with), on a visit to the police cells to see Granado. Guevara soon joined a rugby team that Granado had organized once released. Although Granado was six years older than Guevara, they shared literary and political interests, combined with a romantic enthusiasm for foreign travel. The two soon became close friends, sharing "an intellectual curiosity, a mischievous sense of humor and a restive desire to explore their continent." Asked in an interview many years later about his friendship and time on the road with Guevara, Granado reminisced that "we hit it off well, when there was talk about politics, disease and what not, we almost always shared a similar view."

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