Schlatter was born in Englewood, New Jersey. Growing up in Fair Lawn, New Jersey, he got his start in acting at the borough's Memorial Junior High School. He reportedly only auditioned for the school play Oliver! to impress a girl. He received the lead part of Oliver Twist.
Schlatter attended Ithaca College. He later earned a B.F.A. in musical theater. He starred in numerous school plays and became a skilled musician, playing guitar, drums and piano. He also began writing songs.
Schlatter was spotted by a casting director during a performance in 1987 and was asked to audition for Bright Lights, Big City. This led to his first film appearance, as the younger brother of Michael J. Fox.

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