Henley was the oldest of three sons born to John Henley and his wife, the former Annie Linn, daughter of pioneer banker, Charles Linn. He was born in the family home on 20th Street and 5th Avenue North.
Henley attended Birmingham City Schools and the South Highland Academy, and then enrolled at the Agricultural and Mechanical College of Alabama in Auburn to study engineering, graduating in 1896. For the next two years, Henley served in the Alabama National Guard, completing his service just prior to the Spanish-American War.
Henley followed his father into banking, first as a clerk at First National Bank of Birmingham, and then as a teller at the Birmingham Trust & Savings Bank. He left banking in 1901 to co-found the Little Cahaba Coal Company at Piper, which he served as general manager and treasurer. In 1905 Little Cahaba acquired the nearby Blocton-Cahaba Coal Company at Coleanor.
Henley resumed his association with the Birmingham Trust & Savings Bank as a director. In 1925 he was elected to succeed the late T. O. Smith as president of the bank, a position he held until he retired in 1937, continuing as chairman of the board until January 1950. Henley also served as president and chairman of the Birmingham Realty Company. Henley served as a member of the National Coal Commission during World War I, as president of the Alabama Bankers' Association, and as president of the Birmingham Chamber of Commerce, Birmingham Community Chest and Birmingham Kiwanis Club. He also served on the Birmingham Planning Board, the board of the Jefferson County Civil Works Administration, and as a trustee of the Southern Research Institute. Henley delivered a welcoming address at the 1946 Birmingham Diamond Jubilee banquet at Municipal Auditorium.
After his father's death in 1909, Henley managed his mother's estate, and served as executor at her death in 1921. Henley was married to the former Marie Smith Whitaker in 1934. She brought two children into the home they shared on Cliff Road. Marie died in 1938.
Henley died in December 1961, and is buried at Oak Hill Cemetery. The Linn-Henley Charitable Trust, which awards grant funds to religious, charitable, scientific, literary or educational organizations operating in Jefferson County, was established in 1965 in fulfillment of Henley's will.
- Molton, Thomas Hunter (1922) Molton Family and Kinsmen. Birmingham: Birmingham Publishing Company
- "Henley New President of Birmingham Trust." (November 25, 1925) The Dixie Manufacturer. Vol 13 (new series), p. 10
- "W. E. Henley, local civic leader, dies." (December 13, 1961) The Birmingham News, p. 1, 8
- Walter Henley at Findagrave.com