He was born on Manhattan's Lower East Side to Greek immigrant parents; his mother was from Sparta, and his father was raised in Lefkada.

At Solman's urging, Stamos visited Alfred Stieglitz's influential An American Place Gallery, where he encountered the work of Arthur Dove and Georgia O'Keeffe, among others.

During this period, the late 1930s and early 1940s, Stamos held a variety of odd jobs: printer, florist, hat-blocker, and book salesman.

Through one job, at Herbert Benevy's Gramercy Art frame shop on East 18th Street, he met members of the European avant-garde, including Arshile Gorky and Fernand Léger.

The artist’s paintings from the 1940s combine muted earth-toned colors with biomorphic imagery, suggesting geologic shapes or inchoate organic forms.

He re-defines the pastoral experience as one of participation with the inner life of the natural phenomenon.”[4] During the late 1940s he became a member of The Irascible Eighteen, a group of abstract painters who protested the Metropolitan Museum of Art's policy towards American painting of the 1940s and who posed for a famous picture in 1950; members of the group considered as the 'first generation' of abstract expressionists included: Willem de Kooning, Adolph Gottlieb, Ad Reinhardt, Hedda Sterne, Richard Pousette-Dart, William Baziotes, Jimmy Ernst, Jackson Pollock, James Brooks, Clyfford Still, Robert Motherwell, Bradley Walker Tomlin, Theodoros Stamos, Barnett Newman, and Mark Rothko.

These artists are part of the New York School and they were referred to as The Irascibles in an article featured in an issue of Life where the infamous Nina Leen photograph [5] was published.

These trips both contributed to his aesthetic development and also provided fodder for his broad, deep intellectual interest in the world’s belief systems.

Over twelve years of litigation and appeals, it was revealed that many of Rothko's paintings, which had been sold or consigned by his estate to the Marlborough Gallery in Manhattan, were sold at intentionally deflated prices to favored clients while the gallery collected inflated commissions as high as 50 percent, compared with the 30 percent usually charged for an artist of his caliber; the executors, meanwhile, divided the estate's proceeds from Marlborough as their fees.

Stamos willingly joined the conspiracy, and was enticed to switch his representation from the André Emmerich Gallery by a more generous contract with the Marlborough.