The second son of the renowned statesman and historian Edward Hyde, 1st earl of Clarendon, he entered Parliament in 1660 and was master of the robes from 1662 to 1675. In 1679 he was made first lord of the Treasury and a privy councillor.

Hyde helped defeat Whig efforts (1678–81) to exclude from the succession the Catholic James, duke of York (later King James II), whose first wife had been Hyde's sister. In 1681 Hyde negotiated with the French a secret subsidy that enabled Charles II to remain independent of the Whig-dominated Parliament. He was created a viscount in 1681 and an earl in 1682.

For reasons that are not clear, Rochester was removed from the Treasury in 1684 but was given the lord lieutenancy of Ireland and the relatively powerless position of lord president of the Council. Under James II, Rochester was lord treasurer from 1685 to 1687 but fell from power as James endeavoured to implement his pro-Catholic policies.

Though he was appointed to the Privy Council in 1692, he failed to gain the favour of King William III until late in the reign, when he was lord lieutenant of Ireland (1701–03). In 1702–04 he published his father's great work, History of the Rebellion and Civil Wars in England. Upon the accession of Queen Anne, he became a leader of the Tory High Church Anglican party, and in 1710–11 he was again president of the Council.