Bothe was born to Friedrich Bothe and Charlotte Hartung. From 1908 to 1912, Bothe studied at the Friedrich-Wilhelms-Universität (today, the Humboldt-Universität zu Berlin). In 1913, he was Max Planck's teaching assistant. He was awarded his doctorate, in 1914, under Planck.

In 1913, Bothe joined the Physikalisch-Technische Reichsanstalt (PTR, Reich Physical and Technical Institute; today, the Physikalisch-Technische Bundesanstalt), where he stayed until 1930. Hans Geiger had been appointed Director of the new Laboratory for Radioactivity there in 1912. At the PTR, Bothe was an assistant to Geiger from 1913 to 1920, a scientific member of Geiger's staff from 1920 to 1927, and from 1927 to 1930 he succeeded Geiger as Director of the Laboratory for Radioactivity.

In May 1914, Bothe volunteered for Service in the German cavalry. He was taken prisoner by the Russians and incarcerated in Russia for five years. While there, he learned the Russian language and worked on theoretical physics problems related to his doctoral studies. He returned to Germany in 1920, with a Russian bride.

As a result of his incarceration in Russia during World War I as a prisoner of war, he met Barbara Below, whom he married in 1920. They had two children. She preceded him in death by some years.

On his return from Russia, Bothe continued his employment at the PTR under Hans Geiger in the Laboratory for Radioactivity there. In 1924, Bothe published on his coincidence method. Then and in the following years, he applied this method to the experimental study of the nuclear reactions, the Compton effect, and the wave–particle duality of light. Bothe's coincidence method and his applications of it earned him the Nobel Prize in Physics in 1954.

In 1925, while still at the PTR, Bothe became a Privatdozent at the University of Berlin, which means that he had completed his Habilitation, and, in 1929, he became an ausserordentlicher Professor (extraordinarius professor) there.

In 1927, Bothe began the study of the transmutation of light elements through bombardment with alpha particles. From a joint investigation with H. Fränz and Heinz Pose in 1928, Bothe and Fränz correlated reaction products of nuclear interactions to nuclear Energy levels.

In 1929, in collaboration with Werner Kolhörster and Bruno Rossi who were guests in Bothe's laboratory at the PTR, Bothe began the study of cosmic rays. The study of cosmic radiation would be conducted by Bothe for the rest of his life.

In 1930, he became an ordentlicher Professor (ordinarius professor) and Director of the physics department at the Justus Liebig-Universität Gießen. That year, working with Herbert Becker, Bothe bombarded beryllium, boron, and lithium with alpha particles from polonium and observed a new form of penetrating radiation. In 1932, James Chadwick identified this radiation as the neutron.

In 1932, Bothe had succeeded Philipp Lenard as Director of the Physikalische und Radiologische Institut (Physical and Radiological Institute) at the University of Heidelberg. It was then that Rudolf Fleischmann became a teaching assistant to Bothe. When Adolf Hitler became Chancellor of Germany on 30 January 1933, the concept of Deutsche Physik took on more favor as well as fervor; it was anti-Semitic and against theoretical physics, especially against modern physics, including quantum mechanics and both atomic and nuclear physics. As applied in the university environment, political factors took priority over the historically applied concept of scholarly ability, even though its two most prominent supporters were the Nobel Laureates in Physics Philipp Lenard and Johannes Stark. Supporters of Deutsche Physik launched vicious attacks against leading theoretical physicists. While Lenard was retired from the University of Heidelberg, he still had significant influence there. In 1934, Lenard had managed to get Bothe relieved of his directorship of the Physical and Radiological Institute at the University of Heidelberg, whereupon Bothe was able to become the Director of the Institut für Physik (Institute for Physics) of the Kaiser-Wilhelm Institut für medizinische Forschung (KWImF, Kaiser Wilhelm Institute for Medical Research; today, the Max-Planck Institut für medizinische Forschung), in Heidelberg, replacing Karl W. Hauser, who had recently died. Ludolf von Krehl, Director of the KWImF, and Max Planck, President of the Kaiser-Wilhelm Gesellschaft (KWG, Kaiser Wilhelm Society, today the Max Planck Society), had offered the directorship to Bothe to ward off the possibility of his emigration. Bothe held the directorship of the Institute for Physics at the KWImF until his death in 1957. While at the KWImF, Bothe held an honorary professorship at the University of Heidelberg, which he held until 1946. Fleischmann went with Bothe and worked with him there until 1941. To his staff, Bothe recruited Scientists including Wolfgang Gentner (1936–1945), Heinz Maier-Leibnitz (1936 – ?) – who had done his doctorate with the Nobel Laureate James Franck and was highly recommend by Robert Pohl and Georg Joos, and Arnold Flammersfeld (1939–1941). Also included on his staff were Peter Jensen and Erwin Fünfer.

By the end of 1937, the rapid successes Bothe and Gentner had with the building and research uses of a Van de Graaff generator had led them to consider building a cyclotron. By November, a report had already been sent to the President of the Kaiser-Wilhelm Gesellschaft (KWG, Kaiser Wilhelm Society; today, the Max Planck Society), and Bothe began securing funds from the Helmholtz-Gesellschaft (Helmholtz Society; today, the Helmholtz Association of German Research Centres), the Badischen Kultusministerium (Baden Ministry of Culture), I.G. Farben, the KWG, and various other research oriented agencies. Initial promises led to ordering a magnet from Siemens in September 1938, however, further financing then became problematic. In these times, Gentner continued his research on the nuclear photoeffect, with the aid of the Van de Graaff generator, which had been upgraded to produce energies just under 1 MeV. When his line of research was completed with the Li (p, gamma) and the B (p, gamma) reactions, and on the nuclear isomer Br, Gentner devoted his full effort to the building of the planned cyclotron.

To facilitate the construction of the cyclotron, at the end of 1938 and into 1939, with the help of a fellowship from the Helmholtz-Gesellschaft, Gentner was sent to Radiation Laboratory of the University of California (today, the Lawrence Berkeley National Laboratory) in Berkeley, California. As a result of the visit, Gentner formed a cooperative relationship with Emilio G. Segrè and Donald Cooksey.

The German nuclear Energy project, also known as the Uranverein (Uranium Club), began in the spring of 1939 under the auspices of the Reichsforschungsrat (RFR, Reich Research Council) of the Reichserziehungsministerium (REM, Reich Ministry of Education). By 1 September, the Heereswaffenamt (HWA, Army Ordnance Office) squeezed out the RFR and took over the effort. Under the control of the HWA, the Uranverein had its first meeting on 16 September. The meeting was organized by Kurt Diebner, advisor to the HWA, and held in Berlin. The invitees included Walther Bothe, Siegfried Flügge, Hans Geiger, Otto Hahn, Paul Harteck, Gerhard Hoffmann, Josef Mattauch, and Georg Stetter. A second meeting was held soon thereafter and included Klaus Clusius, Robert Döpel, Werner Heisenberg, and Carl Friedrich von Weizsäcker. With Bothe being one of the principals, Wolfgang Gentner, Arnold Flammersfeld, Rudolf Fleischmann, Erwin Fünfer, and Peter Jensen were soon drawn into work for the Uranverein. Their research was published in the Kernphysikalische Forschungsberichte (Research Reports in Nuclear Physics); see below the section Internal Reports. For the Uranverein, Bothe, and up to 6 members from his staff by 1942, worked on the experimental determination of atomic constants, the Energy distribution of fission fragments, and nuclear cross sections. Bothe's erroneous experimental results on the absorption of neutrons in graphite were central in the German decision to favor heavy water as a neutron moderator.

After the armistice between France and Germany in the summer of 1940, Bothe and Gentner received orders to inspect the cyclotron Frédéric Joliot-Curie had built in Paris. While it had been built, it was not yet operational. In September 1940, Gentner received orders to form a group to put the cyclotron into operation. Hermann Dänzer from the University of Frankfurt participated in this effort. While in Paris, Gentner was able to free both Frédéric Joliot-Curie and Paul Langevin, who had been arrested and detained. At the end of the winter of 1941/1942, the cyclotron was operational with a 7-MeV beam of deuterons. Uranium and thorium were irradiated with the beam, and the byproducts were sent to Otto Hahn at the Kaiser-Wilhelm Institut für Chemie (KWIC, Kaiser Wilhelm Institute for Chemistry, today, the Max Planck Institute for Chemistry), in Berlin. In mid-1942, Gentner's successor in Paris, was Wolfgang Riezler from Bonn.

By late 1941 it was apparent that the nuclear Energy project would not make a decisive contribution to ending the war effort in the near term. HWA control of the Uranverein was relinquished to the RFR in July 1942. The nuclear Energy project thereafter maintained its kriegswichtig (important for the war) designation and funding continued from the military. However, the German nuclear power project was then broken down into the following main areas: uranium and heavy water production, uranium isotope separation, and the Uranmaschine (uranium machine, i.e., nuclear reactor). Also, the project was then essentially split up between nine institutes, where the Directors dominated the research and set their own research agendas. Bothe's Institut für Physik was one of the nine institutes. The other eight institutes or facilities were: the Institute for Physical Chemistry at the Ludwig Maximilian University of Munich, the HWA Versuchsstelle (testing station) in Gottow, the Kaiser-Wilhelm-Institut für Chemie, the Physical Chemistry Department of the University of Hamburg, the Kaiser-Wilhelm-Institut für Physik, the Second Experimental Physics Institute at the Georg-August University of Göttingen, the Auergesellschaft, and the II. Physikalisches Institut at the University of Vienna.

It was during 1941 that Bothe had acquired all the necessary funding to complete construction of the cyclotron. The magnet was delivered in March 1943, and the first beam of deuteron was emitted in December. The inauguration ceremony for the cyclotron was held on 2 June 1944. While there had been other cyclotrons under construction, Bothe's was the first operational cyclotron in Germany.

From 1946, to 1957, in addition to his position at the KWImF, Bothe was an ordentlicher Professor (ordinarius professor) at the University of Heidelberg.

At the end of World War II, the Allies had seized the cyclotron at Heidelberg. In 1949, its control was returned to Bothe.

During 1956 and 1957, Bothe was a member of the Arbeitskreis Kernphysik (Nuclear Physics Working Group) of the Fachkommission II "Forschung und Nachwuchs" (Commission II "Research and Growth") of the Deutschen Atomkommission (DAtK, German Atomic Energy Commission). Other members of the Nuclear Physics Working Group in both 1956 and 1957 were: Werner Heisenberg (chairman), Hans Kopfermann (vice-chairman), Fritz Bopp, Wolfgang Gentner, Otto Haxel, Willibald Jentschke, Heinz Maier-Leibnitz, Josef Mattauch, Wolfgang Riezler, Wilhelm Walcher, and Carl Friedrich von Weizsäcker. Wolfgang Paul was also a member of the group during 1957.

At the end of 1957, Gentner was in negotiations with Otto Hahn, President of the Max-Planck Gesellschaft (MPG, Max Planck Society, successor of the Kaiser-Wilhelm Gesellschaft), and with the Senate of the MPG to establish a new institute under their auspices. Essentially, Walther Bothe's Institut für Physik at the Max-Planck Institut für medizinische Forschung, in Heidelberg, was to be spun off to become a full fledged institute of the MPG. The decision to proceed was made in May 1958. Gentner was named the Director of the Max-Planck Institut für Kernphysik (MPIK, Max Planck Institute for Nuclear Physics) on 1 October, and he also received the position as an ordentlicher Professor (ordinarius professor) at the University of Heidelberg. Bothe had not lived to see the final establishment of the MPIK, as he had died in February of that year.

The following reports were published in Kernphysikalische Forschungsberichte (Research Reports in Nuclear Physics), an internal publication of the German Uranverein. The reports were Classified Top Secret, they had very limited distribution, and the authors were not allowed to keep copies. The reports were confiscated under the Allied Operation Alsos and sent to the United States Atomic Energy Commission for evaluation. In 1971, the reports were declassified and returned to Germany. The reports are available at the Karlsruhe Nuclear Research Center and the American Institute of Physics.