A relative of the author Rudyard Kipling and the painter Sir Edward Burne-Jones, Baldwin was the only son of Alfred Baldwin, chairman of the Great Western Railway and head of a large concern that included iron and steel manufactories and collieries. Young Baldwin was educated at Harrow and at Trinity College, Cambridge. He managed his father's diversified heavy industries for several years. From 1908 to 1937 he was a member of the House of Commons.

In December 1916 he became parliamentary private secretary to Andrew Bonar Law (Law, Bonar), chancellor of the Exchequer in David Lloyd George's World War I coalition ministry. From 1917 to 1921 Baldwin served as financial secretary of the treasury, and in 1921 he became president of the Board of Trade. In October 1922, Bonar Law and Baldwin induced a majority of the Conservative members of Parliament to repudiate Lloyd George's coalition. Baldwin was then appointed chancellor of the Exchequer in the new Conservative government headed by Bonar Law. Sent to Washington, D.C., in January 1923 to settle the British World War I debt to the United States, Baldwin was widely criticized at home for negotiating terms less favourable to Great Britain than had been expected. When ill health forced Bonar Law to retire from his position, it nonetheless was Baldwin whom King George V asked, on May 22, 1923, to form a government. For six months, in the face of uneasy developments abroad, such as the Italian seizure of Corfu, and mounting unemployment at home, Baldwin's government pursued a tranquil course. In October he appealed for a mandate to reverse Bonar Law's free-trade policy; but a mandate was refused, and Baldwin's first ministry ended Jan. 22, 1924.

Baldwin returned to office Nov. 4, 1924, following the downfall of the first Labour prime minister, Ramsay MacDonald. The economic reforms—including the restoration of the wartime McKenna duties (a 40-percent income tax and a 50-percent excess-profits tax), the gold standard, and the silk tax—proposed by Baldwin's appointee to the Exchequer, Winston Churchill, failed to prevent a further slump in the coal trade. When the miners went on strike (May 4, 1926) and they were supported with sympathetic strikes in other vital industries, Baldwin proclaimed a state of emergency, organized volunteers to maintain essential services, and refused to negotiate further with labour until the strike was called off (it ended May 12, 1926). The following year he secured passage of the antiunion Trade Disputes Act.

A Conservative electoral defeat over the issues of unemployment and the Trade Disputes Act caused Baldwin to resign June 4, 1929. Returning to the government in 1931 as lord president of the council in MacDonald's national coalition ministry, he promoted the 10 percent ad valorem tariff and the Ottawa agreements of 1932, which established economic protectionism and impelled numerous Liberal ministers to resign. Upon Adolf Hitler's rise to power in Germany in 1933, Nazism first became recognized as an international threat. Because Baldwin feared the domestic political consequences of British rearmament and a firm foreign policy to meet that threat, he failed to act, later saying, “My lips were sealed.”

From June 7, 1935, to May 28, 1937, Baldwin once more was prime minister. In view of the Italian conquest of Ethiopia, the unopposed German reoccupation of the Rhineland, and German-Italian intervention in the Spanish Civil War, he began to strengthen the military establishment while showing little outward concern. His government faced public outrage over the agreement (December 1935) between Sir Samuel Hoare, the British foreign secretary, and Pierre Laval, the French premier, to permit fascist Italy to have its way in Ethiopia. At home, the determination of the new king, Edward VIII, to marry an American divorcée, Wallis Warfield Simpson, endangered the prestige of the monarchy and perhaps the unity of the British Empire. Baldwin procured Edward's abdication (Dec. 10, 1936) and satisfied public opinion. Five months later he resigned in favour of Neville Chamberlain, accepted an earldom, and retired from politics.