Crain was born in Barstow, California, to George A. Crain, a schoolteacher, and Loretta Carr, who were Irish Catholics. By 1930, they were living in Inglewood, California at 822 S. Walnut Avenue. When her parents divorced in 1934, the family of three moved to 5817 Van Ness Ave in Los Angeles.
An excellent ice skater, Crain first attracted attention when she was crowned Miss Pan-Pacific at the Pan-Pacific Auditorium in Los Angeles. Later, while still in high school, she was asked to take a screen test with Orson Welles, but she did not get the part. After high school, she enrolled at UCLA to study drama. In 1943, at age 18, she appeared in a bit part in the film The Gang's All Here.[citation needed]
The Gang's All Here was produced by 20th Century Fox. Fox then cast Crain in her first sizable role, in the romantic drama Home in Indiana (1944) with Walter Brennan, in which she played the love interest of Lon McCallister's character. The film, shot in Technicolor, was popular at the box office and established Crain as a film name.

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