Tamahori was born in Wellington, New Zealand. He is of Māori ancestry on his father's side and British on his mother's.
Tamahori grew up in Tawa, a northern suburb of Wellington, North Island, New Zealand. Educated at Tawa School and Tawa College, he began his career as a commercial artist and photographer. He moved into the film industry in the late 1970s, initially getting in the door by working for nothing, then working as a boom operator for Television New Zealand, and on the feature films: Skin Deep, Goodbye Pork Pie, and Bad Blood.
In the early 1980s Pork Pie director Geoff Murphy promoted Tamahori to become an assistant director on Utu, and he subsequently worked as first assistant director on The Silent One, Murphy's The Quiet Earth, Came a Hot Friday and Merry Christmas, Mr Lawrence. In 1986 Tamahori co-founded production company Flying Fish, which specialised in making commercials. Tamahori made his name with a series of high-profile television commercials, including one awarded 'Commercial of the Decade'.

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