Nicoll was born at the Manse in Kelso, Scotland, the son of William Robertson Nicoll, a minister of the Free Church of Scotland. He studied science at Cambridge before going on to St. Bartholomew's Hospital and then to Vienna, Berlin and Zurich where he became a colleague of Carl Gustav Jung. Jung's psychological revelations and his own work with Jung during this period left a lasting influence on Nicoll as a young man.