Michael Alig was born on April 29, 1966, in South Bend, Indiana. He was the second son of John and Elke Alig. Elke was originally from Bremerhaven, Germany, and moved to the United States after marrying John, who worked as a computer programmer. When Michael was four years old, his parents got divorced, which was a significant change in his early life.

Growing up, Michael attended Grissom Middle School and Penn High School. He excelled in his studies and was a straight-A student. He graduated in the top 8% of his class in 1984. Despite his academic success, Michael faced challenges during his teenage years. He reported being bullied at school because of his homosexuality, which made his high school experience difficult.

After graduating from high school, Michael moved to New York City to find a more accepting social environment. He enrolled at Fordham University, where he initially studied architecture. However, he later transferred to the Fashion Institute of Technology. At the Fashion Institute, Michael met the boyfriend of famous artist Keith Haring, which introduced him to the vibrant nightlife of New York City.

Michael ended up dropping out of school and started working as a busboy at a club called Danceteria. While working there, he learned about the nightclub business and began promoting parties. This work led him to create a group known as the "Club Kids," where he and other clubgoers developed colorful and outrageous personas. The Club Kids were a unique part of New York's nightlife during the late 1980s and early 1990s.

On the night of March 17, 1996, an argument broke out in Michael Alig's apartment between him and his roommate, Robert D. "Freeze" Riggs, and Andre "Angel" Melendez. The argument was about various issues, including a drug debt owed by Melendez. During this confrontation, Melendez was killed by the two men. Alig later claimed he did not remember the details clearly due to being under the influence of drugs at the time.

After the death of Melendez, Alig and Riggs were unsure of what to do with the body. They initially placed it in the bathtub and filled it with ice. However, as days passed, the body began to decompose, which created a terrible smell. Seeking a solution, Riggs went to a store to buy knives and a box. In exchange for heroin, Alig agreed to help dismember Melendez's body. He cut off Melendez's legs, placing them in separate garbage bags and dumping them into the Hudson River. The torso was placed in a large box that Riggs found in their apartment's basement and was also thrown into the river.

In the weeks following Melendez's disappearance, Alig spoke about the killing to various people, claiming that he and Riggs were responsible. However, most people dismissed him, thinking he was just seeking attention. The police did not focus on Alig for several months because they were investigating his former boss, Peter Gatien. This changed when children discovered a box containing a legless torso in the Hudson River. In November, the coroner confirmed that the remains belonged to Melendez.

After Melendez’s body was identified, Alig fled New York but was eventually found and arrested in a motel in New Jersey. Riggs confessed to the police, detailing how the argument escalated and how Melendez was killed. Although Alig maintained that he acted in self-defense, he was offered a plea deal for manslaughter. Both Alig and Riggs accepted the plea and were sentenced to 10 to 20 years in prison in October 1997.