His birthplace was the James River plantation home of his father, also named William Byrd, an Indian trader and slave importer. The boy went to school in England, travelled in Holland, and studied law in the Middle Temple, London. After he was admitted to the bar in 1695, he returned to Virginia but two years later was again in London as colonial agent. Almost all his youth was thus spent in England, where he became a fellow of the Royal Society. In 1705, after his father died, Byrd returned to Virginia to manage a large estate. Through marriage he became allied to some of the most powerful Virginia families. He was receiver general and a colonel of the county militia, both of which his father had been. In 1709 he was made a king's councillor, an appointment he held for life. He spent the years 1715 to 1726 (except for a trip home in 1720–21) in England, part of the time as colonial agent. He was the spokesman of the large planters against Gov. Alexander Spotswood. Then he returned to the colony for the last time, to lead the busy life of a planter and a member of the ruling clique. He built a large house at Westover, experimented with crops, founded the city of Richmond, collected the largest private library in the colonies (around 4,000 volumes), and acquired some 179,000 acres. Byrd was twice married; he was survived by four daughters and a son, William Byrd III.

His diaries illuminate the domestic economy of the great plantations. His “History of the Dividing Line,” a witty, satirical account of a 1728 survey of the North Carolina–Virginia boundary, for which he was appointed one of the commissioners, is among the earliest colonial literary works, along with his accounts of similar expeditions, “A Journey to the Land of Eden” and “A Progress to the Mines,” published in The Westover Manuscripts (1841). He also kept a less literary but more revealing diary in shorthand published as The Secret Diary of William Byrd of Westover, 1709–12 (1941).