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Laurence Austine Waddell was born in Glasgow, where he was educated, obtaining a bachelor's degree in Medicine followed by a master's degree in both Surgery and Chemistry at Glasgow University in 1878. In 1879 he visited Ceylon and Burma which sparked his interest in Buddhism. In 1880 Waddell joined the British Indian Army and served as a medical officer with the Indian Medical Service. In 1881 he became a Professor of Chemistry and Pathology at the Medical College of Kolkata, India. While working in India, Waddell also studied Sanskrit and edited the Indian Medical Gazette. He became Assistant Sanitary Commissioner under the government of India.
Between 1885-1887 Waddell took part in the British expedition that annexed Upper Burma. After his return from Burma, Waddell was stationed in the Darjeeling district of India, and was appointed Principal Medical Officer in 1888.
Waddell travelled extensively through India in the 1890s including through Nepal, Sikkim, and the Tibetan border, researching Buddhist practices. He learnt Tibetan and made several secret visits there. He also collected Buddhist antiquities and was concerned with the quest to discover the birthplace of Buddha. He also continued his medical practice with the Indian Medical Service including serving in the Boxer Rebellion in China. He was in Malakand in 1902 and part of the Tibetan Mission to Lhasa in 1903-4.
He returned to England and was Professor of Tibetan at University College, London. from 1906-1908. In 1908, Waddell started to learn Sumerian and spent the later years of his life studying Near East culture and Indo-European language origins. He died in 1938.