Holofcener was born to a culturally Jewish family in New York City, the younger of two daughters of artist Lawrence Holofcener and set decorator Carol Joffe (née Shapiro). Her elder sister is Suzanne Holofcener. Nicole's parents divorced when she was a year old. When she was eight, her mother married film producer Charles H. Joffe, who moved the family to Hollywood.
Since her stepfather produced Woody Allen's films, Holofcener spent enough time on Allen's sets to be an extra in Take the Money and Run and Sleeper. Joffe was responsible for Holofcener's first "real" job in the movie industry: a production assistant on Woody Allen's A Midsummer Night's Sex Comedy in 1982. She moved up to apprentice editor for Hannah and Her Sisters (1986).
Holofcener's first experiences with film as a child left her either frightened or sad; she recalled her fright at Jerry Lewis's The Nutty Professor. Holofcener originally wanted to become an artist like her father, but felt she wasn't as talented as others in her classes at Sonoma State University. From there, she gravitated into taking film courses. She studied film at the Tisch School of the Arts at New York University and at Columbia University, and made two shorts titled Angry and It's Richard I Love. While at Columbia, she was taught by Martin Scorsese.

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