Walter Lippmann was born in New York City, 1889, to Jacob and Daisy Baum Lippmann; his upper-middle class German-Jewish family took annual holidays in Europe.

At some time, Lippmann became a member, alongside Sinclair Lewis, of the New York Socialist Party. In 1911, Lippmann served as secretary to George R. Lunn, the first Socialist mayor of Schenectady, New York, during Lunn's first term. Lippmann resigned his post after four months, finding Lunn's programs to be worthwhile in and of themselves, but inadequate as Socialism.

During the war, Lippmann was commissioned a captain in the Army on June 28, 1918, and was assigned to the intelligence section of the AEF headquarters in France. He was assigned to the staff of Edward House in October and attached to the American Commission to negotiate peace in December. He returned to the United States in February 1919 and was immediately discharged.

Lippmann examined the coverage of newspapers and saw many inaccuracies and other problems. He and Charles Merz, in a 1920 study entitled A Test of the News, stated that The New York Times' coverage of the Bolshevik revolution was biased and inaccurate. In addition to his newspaper column "Today and Tomorrow", he wrote several books. Lippmann was the first to bring the phrase "cold war" to Common currency, in his 1947 book by the same name.

Lippmann was an early and influential commentator on mass culture, notable not for criticizing or rejecting mass culture entirely but discussing how it could be worked with by a government licensed "propaganda machine" to keep democracy functioning. In his first book on the subject, Public Opinion (1922), Lippmann said that mass man functioned as a "bewildered herd" who must be governed by "a specialized class whose interests reach beyond the locality." The élite class of intellectuals and experts were to be a machinery of knowledge to circumvent the primary defect of democracy, the impossible ideal of the "omnicompetent citizen". This attitude was in line with contemporary capitalism, which was made stronger by greater consumption.

Later, in The Phantom Public (1925), Lippmann recognized that the class of experts were also, in most respects, outsiders to any particular Problem, and hence not capable of effective action. Philosopher John Dewey (1859–1952) agreed with Lippmann's assertions that the modern world was becoming too complex for every citizen to grasp all its aspects, but Dewey, unlike Lippmann, believed that the public (a composite of many "publics" within society) could form a "Great Community" that could become educated about issues, come to judgments and arrive at solutions to societal problems.

From the 1930s to the 1950s, Lippmann became even more skeptical of the "guiding" class. In The Public Philosophy (1955), which took almost twenty years to complete, he presented a sophisticated argument that intellectual élites were undermining the framework of democracy. The book was very poorly received in liberal circles.

A meeting of liberal intellectuals mainly from France and Germany organized in Paris in August 1938 by French Philosopher Louis Rougier to discuss the ideas put forward by Lippmann in his work The Good Society (1937), Colloque Walter Lippmann was named after him. This meeting is often referred to as the precursor of the first meeting of the Mont Pèlerin Society, convened by Friedrich von Hayek, in 1947. At both meetings the discussions centered on what a new liberalism, or neoliberalism, should look like.

In 1943, George Seldes described Lippmann as one of the two most influential columnists in the United States.

Following the removal from office of Secretary of Commerce (and former Vice President of the United States) Henry A. Wallace in September 1946, Lippmann became the leading public advocate of the need to respect a Soviet sphere of influence in Europe, as opposed to the containment strategy being advocated at the time by George F. Kennan.

He won a special Pulitzer Prize for journalism in 1958, as nationally syndicated columnist, citing "the wisdom, perception and high sense of responsibility with which he has commented for many years on national and international affairs." Four years later he won the annual Pulitzer Prize for International Reporting citing "his 1961 interview with Soviet Premier Khrushchev, as illustrative of Lippmann's long and distinguished contribution to American journalism."

Lippmann was an informal adviser to several Presidents. On September 14, 1964, President Lyndon Johnson presented Lippmann with the Presidential Medal of Freedom. He later had a rather famous feud with Johnson over his handling of the Vietnam War of which Lippmann had become highly critical.

He was mentioned in the monologue before Phil Ochs' recording of "The Marines Have Landed on the Shores of Santo Domingo" on the 1966 album Phil Ochs in Concert.

Lippmann retired from his syndicated column in 1967.

Lippmann died in New York City due to cardiac arrest in New York City, 1974.

Similarities between the views of Lippmann and Gabriel Almond produced what became known as the Almond–Lippmann consensus, which is based on three assumptions: