Bhagavan Baba has revealed that Shirdi Baba was born in early nineteenth century to a pious Brahmin couple in the village of Pathri in the erstwhile Nizam State. The Divine child was born following a boon granted by Lord Shiva and Parvathi to the mother, in appreciation of her deep devotion to God. Shortly before Baba took birth, the father left home for the forest to lead the life of a recluse. The lady followed her husband but could not keep pace, due to the advanced state of her pregnancy. Finally, she had to halt in order to deliver the baby. Once the baby was born, she reluctantly placed it under a tree and went in search of her husband. Soon there came near that tree a Muslim couple who picked up the child and brought it up. In 1842, the adopted father died and the adopted mother handed over charge of the young boy to one Gopal Rao, a rural chieftain. Gopal Rao is said to have placed Baba for some time under the care of a Guru known as Venkusa. Later Gopal Rao passed away, and Baba was now on His own. He wandered for some time and eventually made Shirdi His home.

It is said that Baba came to Shirdi when He was about sixteen years of age. He wore a Kafni, the dress of a Muslim Fakir. He had no home of His own, and spent most of His time under a Neem tree that has since become a pilgrim spot known as Gurusthan. No one knew who this young man was, where He came from, and where He got His food. But this much every one knew: This mysterious young man definitely had a Divine Aura about Him, and was always most compassionate. Indeed, throughout His life, Baba's devotees knew very little about His early history. In the Sai Sat Charita, for example, one finds the remark: "Nobody knew the parents, details of the birth or the birth-place of Sai Baba. Many enquiries were made, many questions were put to Baba and others regarding these items, but no satisfactory answer or information has yet been obtained. Practically, we know nothing about these matters." Indeed, but for the enlightenment provided by Bhagavan Sri Sathya Sai Baba, this mystery would never have been cleared. Divinity often shrouds itself in mystery, and the mystery is removed only when the time and the circumstances are appropriate.

There lived in the village of Dhoop in Aurangabad District of Nizam State, a Muslim named Chand Patil. He was an officer of the Nizam State. Once while making a trip to Aurangabad, Chand Patil lost his mare that he loved very much. He searched for the mare for two long months, but could not find it. When returning from the fruitless search, Patil found a stranger under a tree, preparing to smoke a Chilim or native pipe. On seeing Patil go that way, this stranger accosted the tired merchant, invited him to share a smoke, and rest for a while. A conversation began and Chand Patil told the stranger who was none other than Baba, about the loss of his favourite mare. Baba asked Patil to look in a ravine nearby. Patil did so, and lo and behold, there was his lost mare! Amazed, Patil returned to Baba. Meanwhile, Baba wanted fire to light the Chilim and some water to wet the pipe, both of which Baba produced most casually with a miracle. Patil now believed that Baba was a saint and persuaded Him to go with him to Dhoop. Some years later, Patil came back Shirdi to celebrate a marriage in his family, and Baba returned with Patil. Thereafter Baba never left Shirdi.