Peter Ustinov was born on April 16, 1921, in the Camden area of London to a family with Russian, German, and French roots. His full birth name was Peter Alexander von Ustinov, and he was baptized according to the Protestant rite in the church of Schwäbisch Gmünd, where he received the name Petrus Alexandrus. His grandfather's surname, Platon Grigorievich Ustinov, had a German spelling: Plato Grigorjewitsch Ustinow.

Peter's father, Baron Iona Platonovich Ustinov, was a German journalist and diplomat of Russian descent. During World War I, he worked as a British spy in Germany. The baronial title, presumably granted to Platon Grigorievich Ustinov by Emperor Wilhelm I, became suspicious at the beginning of World War II, and the family had to renounce it. The Ustinov family had roots in the Russian Empire, and Platon's brother, Mikhail, was the consul of Tsarist Russia in Hong Kong.

Peter's mother, artist Nadezhda Leontievna Benois, was the daughter of St. Petersburg architect Leonty Benois and came from the merchant family of Sapozhnikovs on her mother's side. Peter's parents met and married in 1920 in Petrograd, where Iona arrived, as biographers claim, to ascertain the place of his father's death at his mother's request. Soon, they left Russia on a Swedish steamer using false documents and went to Amsterdam, then moved to London.