As a junior in college, Young finished second behind Reggie Bush in the voting for the Heisman Trophy. He won the Davey O'Brien Award which is given annually to the best collegiate quarterback in the nation. Following the Heisman voting, Young led his team to a BCS National Championship against the defending BCS national champion, University of Southern California, in the 2006 Rose Bowl. The game was called one of the most-anticipated games in the history of college football. In 2006, ESPN named Young as the 10th best college football player of all time. Texas retired Young's jersey on August 30, 2008.

Young grew up in the tough Hiram Clarke neighborhood in Houston, Texas, where he was primarily raised by his mother and his grandmother. His father, Vincent Young Sr., missed much of Vince's college career due to a 2003 burglary conviction and prison sentence. Young credits his mother and grandmother for keeping him away from the street gangs. At the age of 7, Young was struck by a vehicle while riding his bicycle at the corner of Tidewater and Buxley, streets in his Houston neighborhood. The accident nearly killed him, leaving him hospitalized for months after the bicycle's handle bar went into his stomach. Today, he credits this event for making him into a "tougher" individual. Vince Young wears the number 10 to show love and respect for his mother, Felicia Young, whose birthday is June 10.

Young was coached by Ray Seals at Madison High School in Houston where he started at quarterback (QB) for three years and compiled 12,987 yards of total offense during his career. During his senior season he led his Madison Marlins to a 61–58 victory in the 5A Regionals over the previously undefeated Galena Park North Shore Mustangs, accounting for more than 400 yards of total offense while passing for three touchdowns and rushing for two more before a crowd of 45,000 in the Houston Astrodome. After beating Missouri City Hightower 56–22 in the state quarterfinals, Houston Madison faced Austin Westlake in the state semi-finals. Although Young completed 18-of-30 passes for 400 yards and five TDs and rushed for 92 yards (on 18 carries) and a TD, Houston Madison lost 42–48.

Among the honors Young received in high school were:

He was also a varsity athlete in numerous other sports. In basketball he played as a guard/forward and averaged more than 25 points per game over his career. This allowed him to be a four-year letterman and two-time all-district performer. In track and field he was a three-year letterman and member of two district champion 400-meter relay squads. In baseball he played for two seasons, spending time as both an outfielder and pitcher. He also made the all-state team in football and in track.

Young chose to sign with Texas in 2002 for its winning tradition and football prominence there. He was part of a Texas recruiting class, which contained future NFL players Rodrique Wright, Justin Blalock, Brian Robison, Kasey Studdard, Lyle Sendlein, David Thomas, Selvin Young, and Aaron Ross. This class has been cited as one of the strongest college recruiting classes ever. Young redshirted his freshman year; this allowed him to learn the playbook and develop his skills before being asked to play in a game situation.

As a redshirt freshman during the 2003 season, Young was initially 2nd on the depth chart behind Chance Mock. However, Mock was benched halfway through the season (in the game against Oklahoma) in favor of Young. After that game, Young and Mock alternated playing time, with Young's running ability complementing Mock's drop-back passing.

As a redshirt sophomore in the 2004 season, Young started every game and led the Longhorns to an 11–1 season record (losing only to rival Oklahoma), a top 5 final ranking, and the school's first-ever appearance and victory in the Rose Bowl, in which they defeated the University of Michigan. He began to earn his reputation as a dual-threat quarterback by passing for 1,849  and rushing for 1,189 yards. The Texas coaches helped facilitate this performance by changing the team offensive scheme from the more traditional I-formation to a Shotgun formation with three wide receivers. This change gave the offense more options in terms of play selection, and consequently made it more difficult to defend against.

Before his junior season, Young appeared on the cover of Dave Campbell's Texas Football alongside Texas A&M quarterback Reggie McNeal.

In his All-America 2005 season, Young led the Longhorns to an 11–0 regular season record. The Longhorns held a #2 ranking in the preseason, and held that ranking through the season except for one week when they were ranked #1 in the Bowl Championship Series. Texas then won the Big 12 championship game and still held their #2 BCS ranking, which earned them a berth in the National Championship Rose Bowl game against the USC Trojans. Before the game, the USC Trojans were being discussed on ESPN and other media outlets as possibly the greatest college football team of all time. Riding a 34-game winning streak, including the previous National Championship, USC featured two Heisman Trophy winners in the backfield, including quarterback Matt Leinart (2004 Heisman winner) and running back Reggie Bush (2005 Heisman winner) who was widely discussed as being possibly the best running back in the history of college football.[citation needed]