Araki was born in Los Angeles on December 17, 1959, to Japanese American parents. He grew up in nearby Santa Barbara, California and enrolled in college at the University of California, Santa Barbara. He graduated with a B.A. from UCSB in 1982. He later attended the University of Southern California's School of Cinematic Arts, where he graduated with a M.F.A. in 1985.
Araki made his directorial debut in 1987 with Three Bewildered People in the Night. With a budget of only $5,000 and using a stationary camera, he told the story of a romance between a video artist, her sweet-heart, and her gay friend. Two years later, Araki followed up with The Long Weekend (O' Despair), another film with a $5,000 budget. His third film, The Living End (1992), saw an increase to $20,000. He had to shoot his early movies often spontaneously and lacking proper permits.
Despite the financial constraints, Araki's films received critical acclaim. He received awards from the Locarno International Film Festival and the Los Angeles Film Critics Association, with an additional nomination for a Sundance Film Festival award.

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