Maxwell Caulfield was born an only child in Duffield, Derbyshire — although he later claimed birth in Glasgow, reportedly to be "more interesting". Although not a child actor, aged around seven he played "Ted" (using the pseudonym Maxwell Findlater) in the 1967 film, Accident, written by Harold Pinter (screenplay) and starring Stanley Baker, Dirk Bogarde, and Michael York.
The actor's American stepfather, Peter Maclaine, a former Marine, reportedly kicked Caulfield out of the house at the age of 15. Caulfield has a half-brother by his mother's second marriage, Marcus Maclaine.
Caulfield became an exotic dancer at London's Windmill Theatre in order to obtain an Equity card enabling him to work as an actor. Later he got his green card through his stepfather. He took his stage surname, Caulfield, from the character in J.D. Salinger's novel Catcher in the Rye. In 1980, Caulfield, then 21, became the third husband of actress Juliet Mills, who is 18 years his senior.
He has been married since 1980 to actress Juliet Mills, 18 years his senior, making him son-in-law of the late veteran actor Sir John Mills and writer Mary Hayley Bell, Lady Mills. He is brother-in-law to his wife's siblings, Jonathan Mills and actress Hayley Mills, and uncle to Hayley Mills' sons, Crispian Mills (lead singer of indie band Kula Shaker) and Jason Lawson. Caulfield is stepfather to actress Melissa (née Melissa Miklenda; Juliet Mills's daughter from her second marriage) and Sean Caulfield (Juliet Mills's son from her first marriage).
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