Born in 1594 in central Tibet to Mipham Tanpai Nyima, the sixteenth incumbent of Ralung and holder of the Gya lineage, and Sonam Palgyi Buthri, a daughter of the Kyishö Depa, a rising noble and patron of the Gelug school, Zhabdrung Ngawang Namgyal was an exceptional child. According to his biographers, both his father and grandfather took full notice of his potential. Even his conception was marked by several auspicious omens. Later, historians and followers would rank him among the many incarnations of Avalokiteśvara, the Buddha of compassion.  

His education began at the age of four or five, and he was a quick learner. Lhawang Lodoe, a distinguished Drukpa scholar and astrologer, became his personal tutor. By the age of eight, he had taken his lay Buddhist vows, and the Sakya hierarch Sonam Wangpo bestowed upon him the title Zhabdrung, which means "at whose feet one submits." 

By thirteen, Zhabdrung had completed much of his training and was formally installed as the leader of the Ralung establishment. The ceremony was attended by many prominent figures from major Tibetan monasteries, who offered prayers for his longevity. This event also solidified his authority amid ongoing debates regarding the recognition of the famous Pema Karpo's reincarnation. His rival, Pagsam Wangpo, born in 1593, had been recognized as Pema Karpo's incarnation by Lhatsewa Ngawang Zangpo, a prominent disciple.