Born in Upper Montclair, New Jersey, Hayden's parents were George and Frances Walter, who named him Montague Relyea Walter. After his father died, he was adopted at the age of nine by James Hayden and renamed Sterling Walter Hayden. As a child, he lived in New Hampshire, Massachusetts, Pennsylvania, Washington D.C., and Maine, where he attended Wassookeag School in Dexter, Maine.

Hayden was a genuine adventurer and man of action, not dissimilar from many of his movie parts. He ran away to sea at 17, as a ship's boy, then later was a fisherman on the Grand Banks of Newfoundland. After serving as sailor and fireman on larger vessels, he was awarded his first command at 19, and sailed around the world several times.

Hayden became a print model and later signed a contract with Paramount Studios, who dubbed the 6' 5" (1.96 m) actor "The Most Beautiful Man in the Movies" and "The Beautiful Blond Viking God". His first film starred Madeleine Carroll, with whom he fell in love and whom he married. But after just two film roles, he left Hollywood to serve as an undercover agent with William J. Donovan's COI office. He remained there after it became the OSS. Hayden also joined the Marines under the name John Hamilton. His World War II service included running guns through German lines to the Yugoslav partisans and parachuting into fascist Croatia. He won the Silver Star and a commendation from Yugoslavia's Marshal Tito.

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