Julian Thoby Stephen, the eldest son of Leslie Stephen and Julia Princep Duckworth, was born at Hyde Park Gate, Kensington, in September 1880. His mother had three children from a previous marriage: George Duckworth (1868–1934), Stella Duckworth (1869–1897), and Gerald Duckworth (1870–1937). Thoby had a a brother and two sisters: Vanessa Stephen (1879), Virginia Stephen (1882) and Adrian Stephen (1883).
Thoby Stephen failed to gain a place at Eton, and instead went to Clifton College. A late developer he won an exhibition to Trinity College. While at the University of Cambridge he met Lytton Strachey, Leonard Woolf, Clive Bell, George Mallory, John Maynard Keynes, and Bertrand Russell.
After the death of their father in 1904 Vanessa and Virginia moved to Bloomsbury. Thorby introduced them to some of his friends that he had met at the University of Cambridge. The group began meeting to discuss literary and artistic issues. The friends, who eventually became known as the Bloomsbury Group, included Clive Bell, John Maynard Keynes, E. M. Forster, Leonard Woolf, Lytton Strachey, David Garnett, Desmond MacCarthy, Arthur Waley and Duncan Grant.
The Stephen family went on holiday to Greece in September 1906. According to Hermione Lee, the author of Virginia Woolf (1996): "For Thoby, Greece was the last long holiday before he was called to the Bar. He was full of energy and ambitions, passionately opinionated and enthusiastic."
Thoby Stephen, who returned home seriously ill from typhoid, died on 20th November 1906.