Avetaranian was born in Erzurum, in 1861, to a Muslim family. His mother was deaf, blind, and mute, and died when Avetaranian was only two years old. His father was a dervish.
He took the Armenian name of John Avetaranian (Avetaran means 'Gospel') and was baptised in Tiflis, Russia (modern-day Tbilisi, Georgia) on 28 February 1885.
In his biography "A Muslim Who Became a Christian", Aveteranian states to have been unaware of his descent from the Islamic prophet, Muhammad, until a trip with his father to Erzurum. During the trip, Aveteranian and his father had put on the Green turbans, to which only the Sayyids or descendants of Muhammad are entitled. Prior to this, he had only worn this once in his childhood. The Green turban had been a gift which was presented to him by his maternal aunt. A local Mullah was astonished to see the green turban, and inquired as to from where he had obtained it. Then he requested Aveteranian to ask whether his aunt was aware that only Sayyids were entitled to wear green turbans. He did so, and the next day, his aunt went to the Mullah and clarified the Mullah's doubts as to their descent when she revealed her father's name. After this incident, Aveteranian gained respect from the Mullah, who would always defer to him, while in Avetaranian's presence.
He left Kashgar in 1897, thinking that he would soon return, but that did not work out. Instead he worked with the German Orient Mission in Bulgaria, where he started a Christian newspaper, Gunesh, in Turkish. The newspaper was circulated in Turkey proper.