Waley was born in Tunbridge Wells, Kent England, as Arthur David Schloss. He changed his surname to the maiden name of his grandmother, Waley, in 1914, because he was a Jew. He was appointed Assistant Keeper of Oriental Prints and Manuscripts at the British Museum in 1913. During this time he taught himself Chinese and Japanese. In 1929 he left to concentrate himself fully to his literary and cultural interests.