The son of a clergyman and brother to Geoffrey Harold Woolley, he was born at 13 Southwold Road, Upper Clapton, in the modern London Borough of Hackney and educated at St John's School, Leatherhead and New College, Oxford. In 1905, Woolley became assistant keeper of the Ashmolean Museum, Oxford. Volunteered by Arthur Evans to run the excavations on the Roman site at Corbridge for Francis Haverfield, Woolley began his excavation career there in 1906, later admitting in Spadework that "I had never studied archaeological methods even from books... and I had not any idea how to make a survey or a ground-plan" (Woolley 1953:15). T. E. Lawrence worked with Woolley on the excavation of the Hittite city of Carchemish from 1912 to 1914. His work at Ur (in charge of the joint venture between the British Museum and the University of Pennsylvania) began in 1922, and he made important discoveries in the course of excavating the royal cemeteries there. Agatha Christie's novel Murder in Mesopotamia was inspired by the discovery of the royal tombs. Christie later married Woolley's young assistant, Max Mallowan.
Ur, found in present-day Iraq, was the burial site of many Sumerian royals. Woolley discovered tombs of great material wealth. Inside these tombs were large paintings of ancient Sumerian culture at its zenith, along with gold and silver jewelry, cups and other furnishings. The most extravagant tomb was that of “Queen” Pu-Abi. Amazingly enough, Queen Pu-Abi’s tomb was untouched by looters. Inside the tomb, many well-preserved items were found, including a cylindrical seal bearing her name in Sumerian. Her body was found buried along with those of two attendants, who had presumably been poisoned in order to continue to serve her after death. Woolley was able to reconstruct Pu-Abi's funeral ceremony from objects found in her tomb. Today her headdress, cylinder seal and body are on display at the University of Pennsylvania.
In 1936, after his discoveries at Ur, Woolley was interested in finding ties between the ancient Aegean and Mesopotamian civilizations. This led him to the Syrian city of Al Mina. From 1937 to 1939 and from 1946 to 1949 he was in Tell Atchana.