He was born in London, the fifth child and only son of a local Congregationalist minister. Raleigh was educated at the City of London School, Edinburgh Academy, University College London, and King's College, Cambridge.
He was Professor of English Literature at the Mohammedan Anglo-Oriental College in Aligarh (1885-87), Professor of Modern Literature at the University College Liverpool (1890-1900), Regius Professor of English Language and Literature at Glasgow University (1900-1904), and Chair of English Literature at Oxford University and Fellow of Merton College, Oxford (1904-22). Raleigh was knighted in 1911.
On the outbreak of World War I he turned to the war as his primary subject. In 1915 he delivered the Vanuxem lectures at Princeton on "The Origins of Romance" and "The Beginnings of the Romantic Revival," and lectured on Chaucer at Brown, which gave him the degree of Litt.D. His finest book may be the first volume of The War in the Air (1922).
He died from typhoid (contracted during a visit to the Near East) in 1922, being survived by his wife Lucie Gertrude, and their four sons and a daughter. His son Hilary edited his light prose, verse, and plays in Laughter from a Cloud (1923).