Thomas Balguy was born on 27 September 1716 at Lamesley, county Durham, where his father, John Balguy, later to become Vicar of Northallerton and prebendary of South Grantham in the diocese of Salisbury, was then a curate. He was educated at the Free School in Ripon, Yorkshire, and on 28 May 1734 was admitted to St John's College, Cambridge, where his father and grandfather had been before him. In 1738 he took the degree of B.A. and in 1741 he became an M.A. (7 July) and was elected to a Platt Fellowship (17 March).

By the time Balguy came to Cambridge, his father had begun to make a name for himself, first in defending Bishop Hoadly in the Bangorian controversy, and then in his vindication of the theological standpoint adopted by Dr Samuel Clarke against that of Francis Hutcheson. Although John Balguy died on 21 September 1748 his connection with Hoadly, in particular, was to prove useful to his son. Before his death, however, he was able to promote Thomas's career, having several livings in his gift as a prebendary of Salisbury. The first of these to become available for his son, was the living of North Stoke in the diocese of Lincoln, which fell vacant by the death of the previous incumbent, Thomas Day, at some time in 1740. Balguy was unable to take the living immediately having yet to be ordained, but clearly his father had earmarked the rectory for him. The evidence suggests that the right of presentation lapsed before Balguy was able to take deacon's and priest's orders, which he did on 21 September and 21 December 1740. Then, by what must have been a previous agreement, the Archbishop of Canterbury, who now had the right to present, collated Balguy on 9 April 1741. Subsequently, in 1746, another living, Hagworthingham, in the gift of the Bishop of Ely, became vacant and was also offered to Thomas. This living was of greater value than North Stoke, estimated at £95 (North Stoke was valued at £55), and in order to hold the two livings together, Balguy had to petition the Archbishop of Canterbury for a dispensation. In the interim he resigned North Stoke and was instituted to Hagworthingham on 26 July 1746.