The early Earth was a toxic wasteland devoid of all life. 

After the crust cooled and began to solidify, volcanoes spewed poison gases, methane and ammonia into the atmosphere.

As water vapor began to collect from Earth's interior (via the volcanoes) and from space, weather started.

Thunderstorms began to fire up and boiling hot, highly acidic rain began to fall for millions of years.

During this time the water collected in the low areas and formed the early oceans.

Lightning started a series of chemical reactions converting Ammonia (NH4) into Nitrogen and Methane (CH4) into CO2 when combined with water.

Most of the Hydrogen drifted off into space.

About 2.5 billion years ago, life arose as single celled plant life called algae.

This blue-green algae began to use CO2 from the atmosphere and release copius amounts of O2 leading to our modern atmosphere.

For a more detailed account go to Earth the First Billion Years