Edward was the second son of the first Prime Minster of Great Britain, Sir Robert Walpole, Earl of Orford, and his first wife, Catherine daughter of John Shorter of Bybrook in Kent. He was a man of considerable ability, but did not trouble to take the place in the World to which his talents entitled him. Music and drawing were his chief delights and his position as Sir Robert’s son enabled him to devote himself to them. He played the bass viol in the Prince of Wales' private orchestra, and invented an instrument called a pentachord.

As a young man, Edward undertook an Italian tour, with Viscount Boyne, lasting a number of years, as was the fashion. In Venice, they were entertained at the famous carnival by the English 'resident' (or ambassador), a Reading man named Col. Elizeus Burges. Edward was rather ill on their first visit, but he recovered and they went on to experience Padua, Bologna, Rome, Naples and Florence. Upon his return to England in 1731, Edward lodged at a house in Pall Mall, the lower part of which was occupied by a dealer in children's clothes. This man employed an extraordinarily handsome seamstress, named Dorothy Clements, of very humble origin. A letter quoted in Thomas' edition of Lady Mary Wortley Montagu's works states, "She was the most remarkable beauty I ever heard of. Being taken notice of one day by Mrs. Seeker, the Bishop of Oxford's daughter, when she was sitting on a dustcart before the Bishop's door, that lady had the curiosity to call her in merely to see her nearer, and assured me that in all her rags and dirt, she never saw a more lovely creature."

Walpole became obviously infatuated with the girl and she, exasperated by the sarcastic remarks of her relatives and friends, finally ran off to the house he had taken near by, and asked for his protection. Edward, who was at dinner at the time, ordered his servant to put a chair for her at the foot of the table, made her the mistress of his heart and home, and doted on her for the few years they had together. However, his dependence on his father prevented the marriage he so much desired; but she bore him four children, before dying almost immediately after the birth of the youngest in 1738.

The bereaved lover allowed no-one to replace her in his affections and, although he subsequently obtained Sir Robert's consent to a match with a Miss Howe, broke it off at the last moment. Dorothy's sister came to look after the children, who were brought up as true Walpoles, and, in later days, only too proudly regarded as such by the family.

Edward was living near Egham in May 1745, when his brother, Horace, wrote to George Montagu of Windsor, "You propose making a visit at Englefield Green, and ask me if I think it right. Extremely so. I have heard it is a very pretty place. You love a jaunt - have a pretty chaise, I believe, and, I dare swear, very easy; in all probability you will have a fine evening too ; and added to all this, the gentleman you would go to see is very agreeable, and good-humoured. He has some very pretty children, and a sensible learned man that lives with him, one Dr. Thirlby, whom I believe you know. The master of the house plays extremely well on the bass viol, and has generally other musical people with him. You may pass a very agreeable day; and, if he does but take to you, as I can't doubt, who know you both, you will contract a great friendship, which he will preserve with the greatest warmth and partiality. In short, I can think of no reason in the world against your going there but one; do you know his youngest brother? If you happen to be so unlucky, I can't advise you to make him a visit, for there is nothing in the world the Baron of Englefield has such an aversion to as his brother."

A sarcastic allusion in another letter shows that Edward had moved to Frogmore House in Windsor by May 1748, at the latest. His eldest girl was taken ill while stopping with an artist's wife at Twickenham shortly afterwards and her uncle, Horace, put her up at Strawberry Hill. This led to a gradual reconciliation between the two brothers, the uncle becoming the devoted slave of the nieces – Laura, Maria and Charlotte - who inherited their mother's loveliness and were soon known as "The Three Graces." Finding the upkeep of Frogmore too costly, the trustees, from whom Edward was leasing the property, finally obtained leave to sell up in August 1748 and he purchased the estate for £2,500. He considerably improved both house and grounds, but also apparently obliterated the wall paintings in the staircase hall with a layer of plain blue paintwork.

Edward had his own friends and did not socialise much with the people of Windsor, who therefore ignored his daughters, till Mrs. Ewer, the wife of one of the canons of St. George’s Chapel, finally introduced them to society. Another canon, Frederick Keppel, subsequently Bishop of Exeter and Dean of St. George's, married Laura in 1758, and his mother, Lady Albemarle, introduced the younger sisters at Court. Maria, then twenty-two and the queen of the bunch - her uncle called her "Beauty itself" - soon captivated Lord Waldegrave, the power behind the throne. Dr. Keppel tied the knot at Luxborough House, Sir Edward's Pall Mall home, on 15th May 1759 and, after a family dinner-party, the pair left for Navestock at 8pm, the bride wearing "a white and silver nightgown and a hat very much pulled over her face." A year later, Charlotte, the youngest girl, became the wife of Lord Huntingtower, who had long admired her from afar, though she did not know him by sight when he asked her father for her hand.

Edward sold Frogmore to Dr. Stephen Waller, in January 1766, for £4,000 and bought the Topham property with its manor house in Peascod Street, Windsor shortly afterwards, settling it on his eldest daughter, Mrs. Keppel, when her husband died in 1778. Edward spent most of his last days at ‘Rails Head’ in Isleworth, which had a wonderful view of the river and which he proposed to christen ‘Raspberry Plain’. He died there on 12th January 1784, after enjoying a life of extraordinary health and happiness. His burial, "attended," according to his instructions, "by a hearse and a single coach" only, took place in the chancel of Windsor Parish Church, of which he was the proprietor. Several members of the Clements family benefited by his will, as of course did his daughters, but his only son, Edward, had predeceased him in 1771.