Asquith was born in Morley, in the West Riding of Yorkshire, the younger son of Joseph Dixon Asquith (1825–1860) and his wife Emily, née Willans (1828–1888). The couple also had three daughters, of whom only one survived infancy. The Asquiths were an old Yorkshire family, with a long nonconformist tradition. It was a matter of family pride, shared by Asquith, that an ancestor, Joseph Asquith, was imprisoned for his part in the pro-Roundhead Farnley Wood Plot of 1664.

Like Sir Robert Peel after 1846 Asquith still controlled the party machinery and resented those who had ousted him, but showed no real interest in reuniting his party. Asquith did not put any pressure on Liberals not to join the government but few did, as the Liberal MPs as a body were intensely loyal to him and felt that he alone should not be left to face the criticism. On 8 December a gathering of Liberal MPs gave Asquith a vote of confidence as Leader of the Liberal Party, followed unanimously a few days later by the executive of the National Liberal Federation. There was much hostility to Lloyd George at these gatherings.

In his younger days he was called Herbert ("Bertie" as a child) within the family, but his second wife called him Henry. His biographer Stephen Koss entitled the first chapter of his biography "From Herbert to Henry", referring to upward social mobility and his abandonment of his Yorkshire Nonconformist roots with his second marriage. However, in public, he was invariably referred to only as H. H. Asquith. "There have been few major national figures whose Christian names were less well known to the public," writes his biographer Roy Jenkins. He and his brother were educated at home by their parents until 1860, when Dixon Asquith died suddenly. Willans took charge of the family, moved them to a house near his own, and arranged for the boys' schooling. After a year at Huddersfield College they were sent as boarders to a Moravian Church school at Fulneck, near Leeds. In 1863 Willans died, and the family came under the care of Emily's brother, John. The boys went to live with him in London; when he moved back to Yorkshire in 1864 for Business reasons, they remained in London and were lodged with various families. The biographer Naomi Levine writes that in effect Asquith was "treated like an orphan" for the rest of his childhood. The departure of his uncle effectively severed Asquith's ties with his native Yorkshire, and he described himself thereafter as "to all intents and purposes a Londoner". Another biographer, H. C. G. Matthew, writes that Asquith's northern nonconformist background continued to influence him: "It gave him a point of sturdy anti-establishmentarian reference, important to a man whose life in other respects was a long absorption into metropolitanism."

In November 1869 Asquith won a classical scholarship at Balliol College, Oxford, going up the following October. The college's prestige, already high, continued to rise under the recently elected Master, Benjamin Jowett. He sought to raise the standards of the college to the extent that its undergraduates shared what Asquith later called a "tranquil consciousness of effortless superiority". Although Asquith admired Jowett, he was more influenced by T. H. Green, White's Professor of Moral Philosophy. The abstract side of philosophy did not greatly attract Asquith, whose outlook was always practical, but Green's progressive liberal political views appealed to him.

Asquith was proxime accessit (runner-up) for the Hertford Prize in 1872, again proxime accessit for the Ireland Prize in 1873, and again for the Ireland in 1874, on that occasion coming so close that the examiners awarded him a special prize of books. However, he won the Craven Scholarship and graduated with what his biographers describe as an "easy" double first class degree in Mods and Greats. After graduating he was elected to a prize fellowship of Balliol.

After his graduation in 1874, Asquith spent several months coaching Viscount Lymington, the 18-year-old son and heir of the Earl of Portsmouth. He found the experience of aristocratic country-house life agreeable. He liked less the austere side of the nonconformist Liberal tradition, with its strong temperance movement. He was proud of ridding himself of "the Puritanism in which I was bred". His fondness for fine wines and spirits, which began at this period, eventually earned him the sobriquet "Squiffy".

Returning to Oxford, Asquith spent the first year of his seven-year fellowship in residence there. But he had no wish to pursue a career as a don; the traditional route for politically ambitious but unmoneyed young men was through the law. While still at Oxford Asquith had already entered Lincoln's Inn to train as a barrister, and in 1875 he served a pupillage under Charles Bowen. He was called to the bar in June 1876.

Between 1876 and 1884 Asquith supplemented his income by writing regularly for The Spectator, which at that time had a broadly Liberal outlook. Matthew comments that the articles Asquith wrote for the magazine give a good overview of his political views as a young man. He was staunchly radical, but as unconvinced by extreme left-wing views as by Toryism. Among the topics that caused debate among Liberals were British imperialism, the union of Great Britain and Ireland, and female suffrage. Asquith was a strong, though not jingoistic, proponent of the Empire, and, after initial caution, came to support home rule for Ireland. He opposed votes for women for most of his political career. There was also an element of party interest: Asquith believed that votes for women would disproportionately benefit the Conservatives. In a 2001 study of the extension of the franchise between 1832 and 1931, Bob Whitfield concluded that Asquith's surmise about the electoral impact was correct. In addition to his work for The Spectator, he was retained as a leader Writer by The Economist, taught at evening classes, and marked examination papers.

Asquith's legal practice was flourishing, and took up much of his time. In the late 1880s Anthony Hope, who later gave up the bar to become a Novelist, was his pupil. Asquith disliked arguing in front of a jury because of the repetitiveness and "platitudes" required, but excelled at arguing fine points of civil law before a judge or in front of courts of appeal. These cases, in which his clients were generally large businesses, were unspectacular but financially rewarding.

Asquith had opposed votes for women as early as 1882, and he remained well known as an adversary throughout his time as prime minister. He took a detached view of the women's suffrage question, believing it should be judged on whether extending the franchise would improve the system of government, rather than as a question of rights. He did not understand—Jenkins ascribed it to a failure of imagination—why passions were raised on both sides over the issue. He told the House of Commons in 1913, while complaining of the "exaggerated language" on both sides, "I am sometimes tempted to think, as one listens to the arguments of supporters of women's suffrage, that there is nothing to be said for it, and I am sometimes tempted to think, as I Listen to the arguments of the opponents of women's suffrage, that there is nothing to be said against it."

Asquith's career as a barrister began to flourish in 1883 when R. S. Wright invited him to join his chambers at the Inner Temple. Wright was the Junior Counsel to the Treasury, a post often known as "the Attorney General's devil", whose function included giving legal advice to ministers and government departments. One of Asquith's first jobs in working for Wright was to prepare a memorandum for the prime minister, W. E. Gladstone, on the status of the parliamentary oath in the wake of the Bradlaugh case. Both Gladstone and his chief law officer, the Attorney General, Sir Henry James, were impressed. This raised Asquith's profile, though not greatly enhancing his finances. Much more remunerative were his new contacts with solicitors who regularly instructed Wright and now also began to instruct Asquith.

The question of Irish Home Rule consumed much of Asquith's time during the final two peacetime years. Support for self-government for Ireland had been a tenet of the Liberal Party since 1886, but Asquith had not been as enthusiastic, stating in 1903 (while in opposition) that the party should never take office if that government would be dependent for survival on the support of the Irish Nationalist Party. After 1910, though, Irish Nationalist support helped keep Asquith in office for the remainder of the prewar period. Retaining Ireland in the Union was the declared intent of all parties, and the Nationalists, as part of the majority that kept Asquith in office, were entitled to seek enactment of their plans for Home Rule, and to expect Liberal and Labour support. The Conservatives were strongly opposed to Home Rule; the Desire to retain a veto for the Lords on such bills had been an unbridgeable gap between the parties in the constitutional talks prior to the second 1910 election.

From time to time Asquith appeared in high-profile Criminal cases. In 1887 and 1888 he defended the radical Liberal MP, Cunninghame Graham, who was charged with assaulting police officers when they attempted to break up a demonstration in Trafalgar Square. Graham was later convicted of the lesser charge of unlawful assembly. In what Jenkins calls "a less liberal cause", Asquith appeared for the prosecution in the trial of Henry Vizetelly for publishing "obscene libels"—the first English versions of Zola's novels Nana, Pot-Bouille and La Terre, which Asquith described in court as "the three most immoral books ever published".

Asquith's law career received a great and unforeseen boost in 1889 when he was named junior counsel to Sir Charles Russell at the Parnell Commission of Enquiry. The commission had been set up in the aftermath of damaging statements in The Times, based on forged letters, that Irish MP Charles Stuart Parnell had expressed approval of Dublin's Phoenix Park killings. When the manager of The Times, J. C. Macdonald, was called to give evidence Russell, feeling tired, surprised Asquith by asking him to conduct the cross-examination. Under Asquith's questioning, it became plain that in accepting the forgeries as genuine, without making any check, Macdonald had, in Jenkins's phrase, behaved "with a credulity which would have been childlike had it not been criminally negligent". The Manchester Guardian reported that under Asquith's cross-examination, Macdonald "squirmed and wriggled through a dozen half-formed phrases in an attempt at explanation, and finished none". The accusations against Parnell were shown to be false, The Times was obliged to make a full apology, and Asquith's reputation was assured. Within a year he had gained advancement to the senior rank of the bar, Queen's Counsel.

Asquith appeared in two important cases in the early 1890s. He played an effective low-key role in the sensational Tranby Croft libel trial (1891), helping to show that the plaintiff had not been libelled. He was on the losing side in Carlill v Carbolic Smoke Ball Co (1892), a landmark English contract law case that established that a company was obliged to meet its advertised pledges.

In September 1891 Helen Asquith died of typhoid fever following a few days' illness while the family were on holiday in Scotland. Asquith bought a house in Surrey, and hired nannies and other domestic staff. He sold the Hampstead property and took a flat in Mount Street, Mayfair, where he lived during the working week.

The general election of July 1892 returned Gladstone and the Liberals to office, with intermittent support from the Irish Nationalist MPs. Asquith, who was then only 39 and had never served as a junior minister, accepted the post of Home Secretary, a senior Cabinet position. The Conservatives and Liberal Unionists jointly outnumbered the Liberals in the Commons, which, together with a permanent Unionist majority in the House of Lords, restricted the government's capacity to put reforming measures in place. Asquith failed to secure a majority for a bill to disestablish the Church of Wales, and another to protect workers injured at work, but he built up a reputation as a capable and fair minister.

In 1893, Asquith responded to a request from Magistrates in the Wakefield area for reinforcements to police a mining strike. Asquith sent 400 Metropolitan policeman. After two civilians were killed in Featherstone when Soldiers opened fire on a crowd, Asquith was subject to protests at public meetings for a period. He responded to a taunt, "Why did you murder the miners at Featherstone in '92?" by saying, "It was not '92, it was '93."

Asquith had known Margot Tennant slightly since before his wife's death, and grew increasingly attached to her in his years as a widower. On 10 May 1894 they were married at St George's, Hanover Square. Asquith became a son in law of Sir Charles Tennant, 1st Baronet. Margot was in many respects the opposite of Asquith's first wife, being outgoing, impulsive, extravagant and opinionated. Despite the misgivings of many of Asquith's friends and colleagues the marriage proved to be a success. Margot got on, if sometimes stormily, with her step-children and she and Asquith had five children of their own, only two of whom survived infancy.:

The general election of July 1895 was disastrous for the Liberals, and the Conservatives under Lord Salisbury won a majority of 152. With no government post, Asquith divided his time between politics and a return to his law practice. Jenkins comments that in this period Asquith earned a substantial, though not stellar, income and was never worse off and often much higher-paid than when in office. Matthew writes that his income as a QC in the following years was around £5,000 to £10,000 per annum (around £500,000–£1,000,000 at 2015 prices). According to Haldane, on returning to government in 1905 Asquith had to give up a £10,000 brief to act for the Khedive of Egypt. Margot later claimed (in the 1920s, when they were short of money) that he could have made £50,000 per annum had he remained at the bar.

His two children by Margot were Elizabeth, later Princess Antoine Bibesco (1897–1945), a Writer, who also struggled with alcohol and Anthony Asquith (1902–1968), known as "Puffin", a film-maker, whose life was also severely affected by alcoholism.

During the Boer War of 1899–1902 Liberal opinion divided along pro-imperialist and "Little England" lines, with Campbell-Bannerman striving to maintain party unity. Asquith was less inclined than his leader and many in the party to censure the Conservative government for its conduct, though he regarded the war as an unnecessary distraction. Joseph Chamberlain, a former Liberal minister, now an ally of the Conservatives, campaigned for tariffs to shield British industry from cheaper foreign competition. Asquith's advocacy of traditional Liberal free trade policies helped to make Chamberlain's proposals the central question in British politics in the early years of the 20th century. In Matthew's view, "Asquith's forensic skills quickly exposed deficiencies and self-contradictions in Chamberlain's arguments." The question divided the Conservatives, while the Liberals were united under the banner of "free fooders" against those in the government who countenanced a tax on imported essentials.

Salisbury's Conservative successor as Prime Minister, Arthur Balfour, resigned in December 1905, but did not seek a dissolution of Parliament and a general election. King Edward VII invited Campbell-Bannerman to form a minority government. Asquith and his close political allies Haldane and Sir Edward Grey tried to pressure him into taking a peerage to become a figurehead Prime Minister in the House of Lords, giving the pro-empire wing of the party greater dominance in the House of Commons. Campbell-Bannerman called their bluff and refused to move. Asquith was appointed Chancellor of the Exchequer. He held the post for over two years, and introduced three budgets.

Asquith led a deeply divided Liberal Party as Prime Minister, not least on questions of foreign relations and defence spending. Under Balfour, Britain and France had agreed upon the Entente Cordiale. In 1906, at the time the Liberals took office, there was an ongoing crisis between France and Germany over Morocco, and the French asked for British help in the event of conflict. Grey, the Foreign Secretary, refused any formal arrangement, but gave it as his personal opinion that in the event of war Britain would aid France. France then asked for military conversations aimed at co-ordination in such an event. Grey agreed, and these went on in the following years, without cabinet knowledge—Asquith most likely did not know of them until 1911. When he learned of them, Asquith was concerned that the French took for granted British aid in the event of war, but Grey persuaded him the talks must continue.

More public was the naval arms race between Britain and Germany. The Moroccan crisis had been settled at the Algeciras Conference, and Campbell-Bannerman's cabinet approved reduced naval estimates, including postponing the laying down of a second Dreadnought-class battleship. Tenser relationships with Germany, and that nation moving ahead with its own dreadnoughts, led Reginald McKenna, when Asquith appointed him First Lord of the Admiralty in 1908, to propose the laying down of eight more British ones in the following three years. This prompted conflict in the Cabinet between those who supported this programme, such as McKenna, and the "economists" who promoted economy in naval estimates, led by Lloyd George and Churchill. There was much public sentiment for building as many ships as possible to maintain British naval superiority. Asquith mediated among his colleagues and secured a compromise whereby four ships would be laid down at once, and four more if there proved to be a need. The armaments matter was put to the side during the domestic crises over the 1909 budget and then the Parliament Act, though the building of warships continued at an accelerated rate.

The budget divided the country and provoked bitter debate through the summer of 1909. The Northcliffe Press (The Times and the Daily Mail) urged rejection of the budget to give tariff reform (indirect taxes on imported goods which, it was felt, would encourage British industry and trade within the Empire) a chance; there were many public meetings, some of them organised by dukes, in protest at the budget. Many Liberal politicians attacked the peers, including Lloyd George in his Limehouse speech, in which he said "a fully-equipped Duke costs as much to keep up as two dreadnoughts (battleships)" and was "less easy to scrap". King Edward privately urged Conservative Leaders Balfour and Lord Lansdowne to pass the Budget (this was not unusual, as Queen Victoria had helped to broker agreement between the two Houses over the Irish Church Act 1869 and the Third Reform Act in 1884). From July it became increasingly clear that the Tory peers would reject the budget, partly in the hope of forcing an election. If they rejected it, Asquith determined, he would have to ask King Edward to dissolve Parliament, four years into a seven-year term, as it would mean the legislature had refused supply. The budget passed the Commons on 4 November 1909, but was voted down in the Lords on the 30th, the Lords passing a resolution by Lord Lansdowne stating that they were entitled to oppose the Finance bill as it lacked an electoral mandate. Asquith had Parliament prorogued three days later for an election beginning on 15 January 1910, with the Commons first passing a resolution deeming the Lords' vote to be an attack on the constitution.

According to Jenkins, although Asquith had at times moved slowly during the crisis, "on the whole, Asquith's slow moulding of events had amounted to a masterly display of political nerve and patient determination. Compared with [the Conservatives], his leadership was outstanding." Churchill wrote to Asquith after the second 1910 election, "your leadership was the main and conspicuous feature of the whole fight". Matthew, in his article on Asquith, found that, "the episode was the zenith of Asquith's prime ministerial career. In the British Liberal tradition, he patched rather than reformulated the constitution."

The Agadir crisis of 1911 was again between France and Germany over Moroccan interests, but Asquith's government signalled its friendliness towards France in Lloyd George's Mansion House speech on 21 July. Late that year, the Lord President of the Council, Viscount Morley, brought the question of the communications with the French to the attention of the Cabinet. The Cabinet agreed (at Asquith's instigation) that no talks could be held that committed Britain to war, and required cabinet approval for co-ordinated military actions. Nevertheless, by 1912, the French had requested additional naval co-ordination and late in the year, the various understandings were committed to writing in an exchange of letters between Grey and French Ambassador Paul Cambon. The relationship with France disquieted some Liberal backbenchers and Asquith felt obliged to assure them that nothing had been secretly agreed that would commit Britain to war. This quieted Asquith's foreign policy critics until another naval estimates dispute erupted early in 1914.

During the continuing escalation Asquith "used all his experience and authority to keep his options open" and adamantly refused to commit his government; "The worst thing we could do would be to announce to the world at the present moment that in no circumstances would we intervene." But he recognised Grey's clear commitment to Anglo-French unity and, following Russian mobilisation on 30 July, and the Kaiser's ultimatum to the Tsar on 1 August, he recognised the inevitability of war. From this point, he committed himself to participation, despite continuing Cabinet opposition; "There is a strong party reinforced by Ll George[,] Morley and Harcourt who are against any kind of intervention. Grey will never consent and I shall not separate myself from him." Also, on 2 August, he received confirmation of Tory support from Bonar Law. In one of two extraordinary Cabinets held on that Sunday, Grey informed members of the 1912 Anglo-French naval talks and Asquith secured agreement to mobilise the fleet.

The invasion of Belgium by German forces, the touch paper for British intervention, saw the Kaiser's armies attempt a lightning strike through Belgium against France, while holding Russian forces on the Eastern Front. To support the French, Asquith's cabinet authorised the despatch of the British Expeditionary Force. The ensuing Battle of the Frontiers in the late summer and early autumn of 1914 saw the final halt of the German advance at the First Battle of the Marne, which established the pattern of attritional trench warfare on the Western Front that continued until 1918. This stalemate brought deepening resentment against the government, and against Asquith personally, as the population at large and the press lords in particular, blamed him for a lack of Energy in the prosecution of the war. It also created divisions within the Cabinet between the "Westerners", including Asquith, who supported the generals in believing that the key to victory lay in ever greater investment of men and munitions in France and Belgium, and the "Easterners", led by Churchill and Lloyd George, who believed that the Western Front was in a state of irreversible stasis and sought victory through action in the East. Lastly, it highlighted divisions between those politicians, and newspaper owners, who thought that military strategy and actions should be determined by the generals, and those who thought politicians should make those decisions. Asquith's view was made clear in his memoirs: "Once the governing objectives have been decided by Ministers at home—the execution should always be left to the untrammeled discretion of the commanders on the spot." Lloyd George's counter view was expressed in a letter of early 1916 in which he asked "whether I have a right to express an independent view on the War or must (be) a pure advocate of opinions expressed by my military advisers?" These divergent opinions lay behind the two great crises that would, within 14 months, see the collapse of the last ever fully Liberal administration and the advent of the first coalition, the Dardanelles Campaign and the Shell Crisis.

Continued Allied failure and heavy losses at the Battle of Loos between September and October 1915 ended any remaining confidence in the British commander, Sir John French and in the judgement of Lord Kitchener. Asquith resorted to a favoured stratagem and, persuading Kitchener to undertake a tour of the Gallipoli battlefield in the hope that he could be persuaded to remain in the Mediterranean as Commander-in-Chief, took temporary charge of the War Office himself. He then replaced French with Sir Douglas Haig; the latter recording in his diary for 10 December 1915; "About 7 pm I received a letter from the Prime Minister marked 'Secret' and enclosed in three envelopes. It ran 'Sir J. French has placed in my hands his resignation … Subject to the King's approval, I have the pleasure of proposing to you that you should be his successor.'" Asquith also appointed Sir william Robertson as Chief of the Imperial General Staff with increased powers, reporting directly to the Cabinet and with the sole right to give them military advice, relegating the Secretary of State for War to the tasks of recruiting and supplying the army. Lastly, he instituted a smaller Dardanelles Committee, re-christened the War Committee, with himself, Balfour, Bonar Law, Lloyd George and Reginald McKenna as members although, as this soon increased, the Committee continued the failings of its predecessor, being "too large and lack(ing) executive authority". None of this saved the Dardanelles Campaign and the decision to evacuate was taken in December, resulting in the resignation from the Duchy of Lancaster of Churchill, who wrote, "I could not accept a position of general responsibility for war policy without any effective share in its guidance and control." Further reverses took place in the Balkans: the Central Powers overran Serbia, forcing the Allied troops which had attempted to intervene back towards Salonika.

His eldest son Raymond, after an academic career that outstripped his father's was killed at the Somme in 1916. His second son Herbert (1881–1947) became a Writer and poet and married Cynthia Charteris. His later life was marred by alcoholism. His third son Arthur (1883–1939), became a soldier and businessman. His only daughter by his first wife, Violet, later Violet Bonham Carter (1887–1969), became a well-regarded Writer and a life peeress as Baroness Asquith of Yarnbury. She married Asquith's Personal Private Secretary Maurice Bonham Carter in 1915. His fourth son Cyril (1890–1954) was born on the day Asquith became a QC and later became a Law Lord.

Outside of the Commons, Margot and he returned to 20 Cavendish Square and he divided his life between there, The Wharf and visiting. Money, in the absence of his premier's salary, became more of a concern. In March 1917 he was informally offered the Lord Chancellorship, with the highest salary in government, but he declined. Personal sadness continued in December 1917 when Asquith's third son Arthur, known in the family as "Oc", was badly wounded fighting in France; his leg was amputated in January 1918. Asquith's daughter-in-law recorded in her diary; "The Old Boy (Asquith) sent me fifteen pounds and also, in a letter, told me the sad news of poor, dear Oc having been badly wounded again."

Asquith filled his retirement with reading, writing, a little golf, travelling and meeting with friends. Since 1918 he had developed an interest in modern painting and sculpture.

A Parliamentary seat was essential if Asquith was again to play any serious part in Future events. By the autumn of 1919 J.M. Hogge was openly critical of Asquith's leadership, and by January 1920 it was rumoured that he had given Asquith an ultimatum that unless he returned to Parliament in a by-election the Independent Liberal MPs would repudiate him as their leader (had he lost a by-election, his position would have been untenable anyway, as he well knew).

Money, or its lack, also became an increasing concern. Margot's extravagance was legendary and Asquith was no longer earning either the legal fees or the prime ministerial salary they had enjoyed in earlier years. Additionally, there were on-going difficulties with Margot's inheritance. In 1920, as an economy measure, 20 Cavendish Square was sold to Viscountess Cowdray and Asquith and Margot moved to 44, Bedford Square.

Asquith did fiercely oppose "the hellish policy of reprisals" in Ireland, impressing the young Oswald Mosley. J.M. Hogge even urged Sir Donald Maclean (31 August) to "knock Asquith into the middle of next week" and seize back the chairmanship of the Liberal MPs. Late in 1921 the National Liberal Federation adopted an industrial programme without Asquith's agreement. On 24 October 1921 Asquith commented "if one tries to strike a bold true note half one's friends shiver and cower, and implore one not to get in front of the band".

Asquith's fall also saw the end of the "Liberal Party as one of the great parties of state." According to Koss, Asquith's memory, "has lingered over the successive crises that continued to afflict his party. Each glimmer of a Liberal revival has enhanced his historical stature, if only as the victim or agent of the Liberal decline." After 1922 the Liberals did not hold office again, except as junior partners in coalition governments in 1931–1932, in 1940–1945, and (as today's Liberal Democrats) in 2010–2015. Leonard considers that responsibility for this must also be carried, in part, by Asquith; "this gifted, fastidious, proud yet ultimately indecisive man must bear his share of the blame."

The poll at Paisley was split by an independent extreme socialist and a Tory. Asquith won with 33.4 per cent of the vote. Nationally, the outcome of the election in December 1923 was a hung Parliament (258 Conservatives, 191 Labour, 158 Liberals); the Liberals had gained seats but were still in third place. A quarter of the seats were held by majority less than 1,000. In general, Asquith Liberals did better than Lloyd George Liberals, which Gladstone and Maclean saw as a reason to prevent close co-operation between the factions.

The 1924 election was Asquith's last Parliamentary campaign, and there was no realistic chance of a return to the Commons. He told Charles Masterman "I'd sooner go to hell than to Wales," the only part of the country where Liberal support remained strong. The King offered him a peerage (4 November 1924). Asquith felt he was not rich enough to accept, and would have preferred to die a commoner like Pitt or Gladstone. He accepted in January 1925 after a holiday in Egypt with his son Oc. He deliberately chose the title "Earl of Oxford", saying it had a splendid history as the title chosen by Robert Harley, a Tory statesman of Queen Anne's reign. He was thought by some to have delusions of grandeur, Lady Salisbury writing to him that the title was "like a suburban villa calling itself Versailles." Asquith found the controversy amusing but the College of Heralds insisted that he add "and Asquith" to the final title, after protests from Harley's descendants. In practice he was known as "Lord Oxford". He never enjoyed the House of Lords, and thought the quality of debates there poor.

Difficulties continued with Lloyd George, who had been chairman of the Liberal MPs since 1924, over the party leadership and over party funds. In the autumn of 1925 Hobhouse, Runciman and the industrialist Sir Alfred Mond protested to Asquith at Lloyd George organising his own campaign for reform of land ownership. Asquith was "not enthusiastic" but Lloyd George ignored him and arranged for Asquith to be sent reports and calculations ("Lord Oxford likes sums" he wrote). At a meeting on 25 November 1925 Grey, Maclean, Simon, Gladstone and Runciman urged Asquith to have a showdown with Lloyd George over money. Asquith wanted to think it over, and at the December 1925 Federation executive he left the meeting before the topic came up. To the horror of his followers Asquith reached an agreement in principle with Lloyd George over land reform on 2 December, then together they presented plans to the National Liberal Federation on 26 February 1926. But, wrote Maclean, "in private Asquith's language about Lloyd George was lurid."

Margot is said to have later claimed that her husband regretted the breach and had acted after several rich donors had threatened to quit. Asquith finally resigned the Liberal leadership on 15 October 1926.

Asquith suffered a second stroke in January 1927, disabling his left leg for a while and leaving him a wheelchair-user for the spring and early summer of 1927. Asquith's last visit was see the widowed Venetia Montagu in Norfolk. On his return to The Wharf, in autumn 1927, he was unable to get out of his car and "he was never again able to go upstairs to his own room." He suffered a third stroke at the end of 1927. His last months were difficult, and he became increasingly confused, his daughter Violet writing; "To watch Father's glorious mind breaking up and sinking—like a great ship—is a pain beyond all my imagining."

Asquith died, aged 75, at The Wharf on the morning of 15 February 1928. "He was buried, at his own wish, with great simplicity," in the churchyard of All Saints' at Sutton Courtenay, his gravestone recording his name, title, and the dates of his birth and death. A blue plaque records his long residence at 20 Cavendish Square and a memorial tablet was subsequently erected in Westminster Abbey. Viscount Grey, with Haldane Asquith's oldest political friends, wrote; "I have felt (his) death very much: it is true that his work was done but we were very close together for so many years. I saw the beginning of his Parliamentary life; and to witness the close is the end of a long chapter of my own."

Asquith's reputation will always be heavily influenced by his downfall at the height of the First World War. In 1930, Basil Liddell Hart summed up opinion as to the reasons for his fall; "Lloyd George (came to) power as the spokesman for a widespread demand for a more vigorous as well as a more efficient prosecution of the war." Asquith's collegiate approach; his tendency to "wait and see;" his stance as the chairman of the cabinet, rather than leader of a government—"content to preside without directing;" his "contempt for the press, regard(ing) journalists as ignorant, spiteful and unpatriotic;" and his weakness for alcohol—"I had occasion to speak to the P.M. twice yesterday and on both occasions I was nearly gassed by the alcoholic fumes he discharged;" all contributed to a prevailing sense that Asquith was unable to rise to "the necessities of total warfare." Grigg concludes, "In certain vital respects, he was not qualified to run the war. A great head of government in peacetime, by the end of 1916 he was in a general state of decline, his obvious defects as a war leader (exposed)." Cassar, reflecting on Asquith's work to bring a united country to war, and his efforts in the year thereafter, goes towards a reassessment; "His achievements are sufficiently impressive to earn him a place as one of the outstanding figures of the Great War" His contemporary opponent, Lord Birkenhead paid tribute to his bringing Britain united into the War, ""A statesman who rendered great Service to his country at a time when no other living Englishman could have done what he did." The Coalition Whip, william Bridgeman, provided an alternative Tory view, comparing Lloyd George to Asquith at the time of the latter's fall; "however unpopular or mistrusted (Lloyd George) was in the House, he carried much more weight in the Country than Asquith, who was almost everywhere looked on as a lazy and dilatory man." Sheffield and Bourne provide a recent historical reassessment; "Asquith's governments arguably took all the key decisions of the War: the decision to intervene, to send the BEF; to raise a mass volunteer army; to start and end the Gallipoli Campaign; the creation of a Coalition government; the mobilisation of industry; the introduction of conscription." But the weight of opinion continues to agree with Asquith's own candid assessment, in a letter written in the midst of war in July 1916; "I am (as usual) encompassed by a cloud of worries, anxieties, problems and the rest. 'The time is out of joint' and sometimes I am tempted to say with Hamlet 'O cursed spite, that ever I was born to set it right.' Perhaps I wasn't."

Jenkins considered Asquith as foremost amongst the great social reforming premiers of the twentieth century. His Government's social and political reforms were unprecedented and far-sighted; "paving the way for the welfare state legislation of the Attlee government in 1945–1951 as well as Blair's constitutional reforms after 1997." According to Roy Hattersley, a changed Britain entered the war in 1914, "the political, social and cultural revolution had already happened. Modern Britain was born in the opening years of the twentieth century." Asquith also worked strenuously to secure a settlement of the Irish question and, although unsuccessful, his work contributed to the 1922 settlement. Lastly, as a "great head of a Cabinet", Asquith directed and developed the talents of an extraordinary array of parliamentarians, for an extraordinarily long period. Hazlehurst contends that this "ability to keep so gifted and divergently-inclined a group in harness (was) one of his major achievements." Overall, the Brocks argue that; "on the basis of his achievements 1908 to 1914 he must rank among the greatest British statesmen of any era." His oldest political and personal friend, Haldane, wrote to Asquith on the latter's final resignation; "My Dear A., a time has come in both of our lives when the bulk of work has been done. That work does not pass away. It is not by overt signs that its enduring character is to be judged. It is by the changes made in the spirit of things into which the work has entered."

Among his living descendants are his great-granddaughter, the Actress Helena Bonham Carter (b. 1966), and two great-grandsons, Dominic Asquith, British High Commissioner to India since March 2016, and Raymond Asquith, 3rd Earl of Oxford and Asquith, the heir to Asquith's earldom. Another leading British Actress, Anna Chancellor (b. 1965), is also a descendant, being Asquith's great-great-granddaughter on her mother's side.

Koss concludes that, in a "long, eventful and complex career, (that) does not admit easily of a summing up, Asquith's failings were no less manifest than his achievements." Michael and Eleanor Brock maintain that "his peacetime record of legislative achievement should not be overshadowed by his wartime inadequacy." Of those achievements, his colleague Lord Buckmaster wrote; "The dull senses and heavy lidded eyes of the public prevent them from seeing now all that you have accomplished, but history will record it and the accomplishment is vast." Among his greatest domestic accomplishments, reform of the House of Lords is at the zenith. Yet Asquith's premiership was also marked by many difficulties, leading McKenna to write in his memoirs, "friends began to wonder whether the highest statesmanship consisted of overcoming one crisis by creating another". Hazlehurst, writing in 1970, felt there was still much to be gleaned from a critical review of Asquith's peacetime premiership, "certainly, the record of a prime minister under whom the nation goes to the brink of civil war [over Ireland] must be subjected to the severest scrutiny."

The result was stupendous, with Asquith defeating his Labour opponent by a majority of over 2000 votes, with the Coalition candidate a very poor third. Violet was ecstatic; "every star in the political skies favoured Father when we left Paisley, he became there what he has never before been in his life, the 'popular' candidate, the darling of the crowd." The poll was up by 8,000 from 1918. Asquith's surprise victory was helped by the support of the press baron Lord Rothermere.

On 11 November, Asquith asked King George to dissolve Parliament for another general election in December, and on the 14th met again with the King and demanded assurances the monarch would create an adequate number of Liberal peers to carry the Parliament Bill. The King was slow to agree, and Asquith and his cabinet informed him they would resign if he did not make the commitment. Balfour had told King Edward that he would form a Conservative government if the Liberals left office but the new King did not know this. The King reluctantly gave in to Asquith's demand, writing in his diary that, "I disliked having to do this very much, but agreed that this was the only alternative to the Cabinet resigning, which at this moment would be disastrous".

As Asquith brought MacDonald in so, later in the same year, he had significant responsibility for forcing him out over the Campbell Case and the Russian Treaty. The Conservatives proposed a vote of censure against the Government for withdrawing their prosecution for sedition against the Daily Worker, and Asquith moved an amendment calling for a select committee (the same tactic he had employed over the Marconi scandal and the Maurice Debate). Asquith's contribution to the debate showed an increasingly rare return to Parliamentary form. "Almost every one of his delightful sentences filled the Chamber with laughter." Asquith's motion was passed by 364–198. As in the Maurice Debate, his sense of political tactics was, in Jenkins' view, overcome by his sense of Parliamentary propriety. He could not bring himself to withdraw the amendment, but could not support the government either.

In private, both sides were incandescent; one of Asquith's colleagues describing him as; "far more indignant at L.G. than I have ever seen", whilst Lloyd George expressed his private feelings in a letter to Frances Stevenson on 24 May "(Asquith) is a silly old man drunk with hidden conceit. When he listens to those poor creatures he has a weakness for gathering around him he generally makes a fool of himself. They are really 'beat'. Dirty dogs—and bitches."