Walter Gilbert was born in Boston, Massachusetts, on March 21, 1932, the son of Emma (Cohen), a child Psychologist, and Richard V. Gilbert, an Economist.

Gilbert married Celia Stone, the daughter of I. F. Stone, in 1953 and has two children. After retiring from Harvard in 2001, Gilbert has launched an artistic career centered on digital photography.

Gilbert returned to Harvard in 1956 and was appointed assistant professor of physics in 1959. Gilbert's wife Celia worked for James Watson, leading Gilbert to become interested in molecular biology. Watson and Gilbert ran their laboratory jointly through most of the 1960s, until Watson left for Cold Spring Harbor Laboratory. In 1964 he was promoted to associate professor of biophysics and promoted again in 1968 to professor of biochemistry.

Gilbert has also been honored by the National Academy of Sciences (US Steel Foundation Award, 1968); Massachusetts General Hospital (Warren Triennial Prize, 1977); the New York Academy of Sciences; (Louis and Bert Freedman Foundation Award, 1977), the Académie des Sciences of France (Prix Charles-Leopold Mayer Award, 1977). Gilbert was elected a Foreign Member of the Royal Society (ForMemRS) in 1987.

In 1969, Gilbert was awarded Harvard's Ledlie Prize. In 1972 he was named American Cancer Society Professor of Molecular Biology. In 1979, Gilbert was awarded the Louisa Gross Horwitz Prize from Columbia University together with Frederick Sanger. That year he was also awarded the Gairdner Prize and the Albert Lasker Award for Basic Medical Research.

Gilbert first proposed the existence of introns and exons and explained the evolution of introns in a seminal 1978 "News and Views" paper published in Nature. In 1986, Gilbert proposed the RNA world hypothesis for the origin of life, based on a concept first proposed by Carl Woese in 1967.

Gilbert was awarded the 1980 Nobel Prize in Chemistry, shared with Frederick Sanger and Paul Berg. Gilbert and Sanger were recognized for their pioneering work in devising methods for determining the sequence of nucleotides in a nucleic acid.

Gilbert returned to Harvard in 1985. Gilbert was an outspoken critic of David Baltimore in the handling of the scientific fraud accusations against Thereza Imanishi-Kari. Gilbert also joined the early controversy over the cause of AIDS. In 1962, Gilbert's Ph.D. student in physics Gerald Guralnik extended Gilbert's work on massless particles; Guralnik's work on is widely recognized as an important thread in the discovery of the Higgs Boson.

Gilbert was an early proponent of sequencing the human genome. At a March 1986 meeting in Santa Fe New Mexico he proclaimed "The total human sequence is the grail of human genetics". In 1987, he proposed starting a company called Genome Corporation to sequence the genome and sell access to the information. In an opinion piece in Nature in 1991, he envisioned completion of the human genome sequence transforming biology into a field in which computer databases would be as essential as laboratory reagents

In 1996, Gilbert and Stuart B. Levy founded Paratek Pharmaceuticals. Gilbert served as Chairman until 2014.

In 2002, he received the Biotechnology Heritage Award.

Together with Allan Maxam, Gilbert developed a new DNA sequencing method, Maxam–Gilbert sequencing, using chemical methods developed by Andrei Mirzabekov. His approach to the first synthesis of insulin via recombinant DNA lost out to Genentech's approach which used genes built up from the nucleotides rather than from natural sources. Gilbert's effort was hampered by a temporary moratorium on recombinant DNA work in Cambridge, Massachusetts, forcing his group to move their work to an English biological weapons site.

Allan Maxam and Walter Gilbert’s 1977 paper “A new method for sequencing DNA” was honored by a Citation for Chemical Breakthrough Award from the Division of History of Chemistry of the American Chemical Society for 2017. It was presented to the Department of Molecular & Cellular Biology, Harvard University.