Born into a half-and-half family, his Father was a Muggle and his Mother was a Witch. Riddle is the last descendant of Salazar Slytherin and therefore his heir.

His Father, not liking magic at all, left his wife and returned to his Muggle parents before Tom was born. His mother died in childbirth, leaving him to be raised in a Muggle orphanage.
As Riddle grew older, he got accepted at Hogwart's and left the orphanage. Through his years, he showed his learning skills and claimed the titles of Head Boy and Prefect.

Riddle soon found out that he was the heir to Salazar Slytherin. The legend of Hogwart's stated that Slytherin only wanted pure bloods to be taught at the school. But since Gryffindor, Ravenclaw and Hufflepuff also created the school, they declined causing a huge argument. Slytherin left the school for the other three wizards to run, but not before he made one last chamber, a secret chamber that only the heir of Slytherin could unlock. The chamber held a terrible monster called the Basilisk. If anyone or anything made eye contact with a Basilisk, they would die of horror.

Riddle located the hidden chamber and found out how to open it. He released the Basilisk inside with the intention of killing all the unpures blood lines. Fortunatley only one student at Hogwarts was killed in the girls bathroom.
Before anyone realised who was behind the attacks, Riddle framed Rubeus Hagrid and he was forced to be expelled. However, the Transfiguration teacher Professor Dumbledore persuaded everyone to let him stay as game keeper at the school.

Since his goal was not accomplished, Riddle preserved his memory in his diary with the hope that someone, someday, would find the diary and unlock the chamber once more...