Madison was born in Astoria, Oregon.She has one younger sister, Stephanie, and a younger brother, Joe; both of whom were featured on season 3 and season 4 episodes of "The Girls Next Door." Her father's work in the timber industry led her family to travel. From ages two through eleven, she lived on Prince of Wales Island, near Ketchikan, Alaska. Her family later moved back to Oregon, this time to St. Helens. She attended Portland State University for two years, majoring in both theater and psychology.
In 1999, Madison moved to Los Angeles to attend Loyola Marymount University.
To afford college tuition, she competed to become a Hawaiian Tropic model and worked at Hooters. Madison's appearance at these venues led to invitations to Hefner's Playboy Mansion. After more than a year of such visits, Madison was invited to move in. She became one of Hefner's seven official girlfriends in August 2001. In February 2002, after all but two of his girlfriends left, Madison became Hefner's "#1 Girl" and moved into his bedroom. She was named among the top Hooters girls of all time in 2008 as part of the restaurant's twenty-fifth anniversary.
Madison has spoken openly about her cosmetic surgeries, having had both a rhinoplasty and breast augmentation. After the latter procedure, her bust measurements went from an A-cup to a D.[6] She also once had a red Playboy Bunny logo tattooed on her lower back but later had it removed.