Khayyam was born in Nishapur, then a Seljuk capital in Khorasan (present Northeast Iran), rivalling Cairo or Baghdad. He is thought to have been born into a family of tent makers (literally, al-khayyami means "tent maker"); later in life he would make this into a play on words:

Khayyam, who stitched the tents of science,

Has fallen in grief's furnace and been suddenly burned,

The shears of Fate have cut the tent ropes of his life,

And the broker of Hope has sold him for nothing! [2]

He spent part of his childhood in the town of Balkh (present northern Afghanistan), studying under the well-known scholar Sheik Muhammad Mansuri. Subsequently, he studied under Imam Mowaffaq Nishapuri, who was considered one of the greatest teachers of the Khorassan region.

According to a well-known legend called Three Schoolmates, two other exceptional students studied under the Imam Mowaffaq at about the same time: Nizam-ul-Mulk (b. 1018), who went on to become the Vizier to the Seljukid Empire, and Hassan-i-Sabah (b.1034), who became the leader of the Hashshashin (Nizar Ismaili) sect. It was said that these students became friends, and after Nizam-ul-Mulk became Vizier, Hassan-i-Sabah and Omar Khayyám each went to him, and asked to share in his good fortune. Hassan-i-Sabah demanded and was granted a place in the government, but he was ambitious, and was eventually removed from power after he participated in an unsuccessful effort to overthrow his benefactor, the Vizier. Omar Khayyám was more modest and asked merely for a place to live, study science, and pray. He was granted a yearly pension of 1,200 mithkals of gold from the treasury of Nishapur. He lived on this pension for the rest of his life.

The authenticity of this legend is dubious and is rejected by many scholars (e.g. Foroughi and Aghaeipour)[3], in part due to the 30 year age difference between Khayyam and Nizam-ul-Mulk, which makes it unlikely for the two to have attended school together, also considering the fact that the three men grew up in different parts of the country. The popularity and spread of the legend however, is notable and could perhaps be explained by the fact that the three men where the most prominent figures of their time and represented three dominant approaches to reform and betterment of the society, namely, scientific discovery, represented by Khayyam, armed rebellion, represented by Hassan-i-Sabah, and strengthening the power establishment and the rule of law and order, represented by Nizam-ul-Mulk.

 Mathematician

Omar Khayyam was famous during his times as a mathematician. He wrote the influential Treatise on Demonstration of Problems of Algebra (1070), which laid down the principles of algebra, part of the body of Arabic Mathematics that was eventually transmitted to Europe. In particular, he derived general methods for solving cubic equations and even some higher orders:

From the Indians one has methods for obtaining square and cube roots, methods which are based on knowledge of individual cases, namely the knowledge of the squares of the nine digits 12, 22, 32 (etc.) and their respective products, i.e. 2 × 3 etc. We have written a treatise on the proof of the validity of those methods and that they satisfy the conditions. In addition we have increased their types, namely in the form of the determination of the fourth, fifth, sixth roots up to any desired degree. No one preceded us in this and those proofs are purely arithmetic, founded on the arithmetic of The Elements. - Omar Khayyam: Treatise on Demonstration of Problems of Algebra[4]

His method for solving cubic equations worked by intersecting a conic section with a circle (examples[5]). Although this approach had been used earlier by Menaechmus and others, Khayyám provided a generalization extending it to all cubics with positive roots. In addition he discovered the binomial expansion. His method for solving quadratic equations is also similar to what is used today.

In the Treatise he also wrote on the triangular array of binomial coefficients known as Pascal's triangle. In 1077, Omar wrote Sharh ma ashkala min musadarat kitab Uqlidis (Explanations of the Difficulties in the Postulates of Euclid). An important part of the book is concerned with Euclid's famous parallel postulate, which had also attracted the interest of Thabit ibn Qurra. Al-Haytham had previously attempted a demonstration of the postulate; Omar's attempt was a distinct advance, and his criticisms made their way to Europe, and may have contributed to the eventual development of non-Euclidean geometry.

Omar Khayyám also had other notable work in geometry, specifically on the theory of proportions.