Ptolemy was born in 367 as the son of a Macedonian nobleman named Lagus and a woman named Arsinoe, who may or may not have belonged to a minor branch of the Macedonian dynasty. Their son is called a youth friend of Alexander, but being older than the crown prince, his role can perhaps better be interpreted as that of some sort of adviser.
One of the anecdotes about Alexander's youth presents Ptolemy in exactly this function: after the battle of Chaeronea (338), in which Alexander's father Philip defeated the Greeks, Ptolemy advised Alexander to intervene in a marriage alliance concluded by Philip between his son Arridaeus and the daughter of the satrap of Caria, Pixodarus. The result of Alexander's intervention was a disaster and the Macedonian king ordered Ptolemy to give his advise henceforth outside Macedonia. The exiled man did not return until Alexander had become king in the autumn of 336.
Ptolemy probably took part in Alexander's Persian campaign from the very beginning, in 334. There is one casual reference to a Ptolemy who was present during the northern campaign of 335, but we are not certain whether this refers to the son of Lagus or another Ptolemy. However this may be, the son of Lagus certainly took part in the battle of Issus in November 333 and joined Alexander's journey to the oracle of Ammon, in the Libyan desert, in the spring of 331. The historian Arrian of Nicomedia records Ptolemy's presence during the battle in the Persian gate, but as Arrian's account is based on Ptolemy's own History of Alexander, and other sources are silent about his actions, we must probably take Arrian's story with a grain of salt.
We have more certainty about his presence in Persepolis, which was sacked by Alexander on advise of Ptolemy's mistress Thais (text). We know not much about their affair, except for the fact that she bore him two sons, Lagus and Leontiscus, and a daughter Irene ("peace").
In December 330, after the Philotas affair, Ptolemy was appointed as somatophylax, one of the seven bodyguards who served as Alexander's deputies. Ptolemy's first independent command was immediately after the crossing of the river Oxus, when news arrived that Spitamenes wanted to hand over Bessus, the last Achaemenid king. From modern Termez, Ptolemy proceeded to the north and accepted the extradition at Nautaca.
Ptolemy's whereabouts in the initial phase of the Sogdian war are not known, but in 328, he commanded one of five armies that forced the Sogdian population to give up their ancient way of life and settle in cities. Ptolemy was also present during the siege of the Rock of Sisimithres.
As a bodyguard, Ptolemy was unable to prevent that Alexander murdered Clitus, and not much later, he played (together with Leonnatus) a role in the discovery of the conspiracy of the pages. This must have endeared him to the king, who regretted the first act and owed his life to the second.
Now, Ptolemy rapidly rose to prominence. Together with Craterus and Coenus, he had important commands during the Swat campaign (326) and he commanded the advance guard during the capture of the Aornus. During the expedition against the Mallians, he commanded the northernmost army, which had to catch all refugees and kill them. Along the southern Indus, Ptolemy was wounded by a poison arrow, but he survived - according to Diodorus of Sicily because Alexander knew the counterpoison. The anecdote suggests that the two men were close friends, and is often believed to be propaganda.
Ptolemy also became friends with Calanus, an Indian sage who followed Alexander to the west and fell ill in Pasargadae. Ptolemy erected a funeral pyre, on which the Indian burned himself alive (text). When Alexander celebrated the marriages of Susa (spring 324; text), Ptolemy married to Artacama, the daughter of a loyal Persian courtier named Artabazus. At the same time, he received a diadem and was appointed as edeatros, "taster" of the royal food, which was probably a Persian court title.
Next year, we find Ptolemy as Alexander's second-in-command in the army that fought against the Cossaeans, a nomadic tribe from what is now called Luristan in the Zagros mountains. This was the last campaign of Alexander. A few months later, the conqueror died in Babylon (11 June 323).
Next day, Alexander's vizier Perdiccas invited the main officers of the Macedonian army for a meeting to discuss the future (text). He proposed to wait until Alexander's Iranian wife Roxane had given birth to the child she was pregnant of. If it were a son, he had to be recognized as king. Admiral Nearchus objected: Alexander already had a son named Heracles by his mistress Barsine.Ptolemy objected too: these boys were half-breeds. His proposal was that the most important decisions were to be taken by those present, as some kind of collective Macedonian leadership. In fact, he wanted to replace the Macedonian monarchy by an aristocracy of military leaders.
In the end, a compromise was reached - although it was, at first sight, as if Perdiccas had obtained supreme power. Everybody recognized Perdiccas as regent of Alexander's mentally deficient brother Arridaeus, who was from now on called king Philip. At the same time, the most influential officers received important satrapies, and Ptolemy became governor of wealthy Egypt. By giving important parts of the empire to influential officers, Perdiccas seemed to have reached all his aims: the frontiers were guarded by strong men, and these strong men were away from the Macedonian court, which he could control.
But Perdiccas was wrong. The future belonged to separatists, as we will see below.
People like Ptolemy in Egypt, Antipater in Macedonia, Lysimachus in Thrace, Antigonus Monophthalmus in Asia Minor, and Seleucus in Babylonia (collectively known as the Diadochi, 'successors') were slowly but securely creating something new. Where Alexander had been a destroyer, the Diadochi were creators and builders. One sign of this is Ptolemy's second marriage, with an Egyptian lady. He was courting the local population. His first wife Artacama was sent away.
It was not the only attempt to gain sympathy from the native Egyptians. In these years, Ptolemy also founded the cult of Serapis, an Egyptian god who was "recreated" in such a fashion that he was acceptable to the Greeks and Macedonians.