Birley was educated at Clifton College.He then studied classics at Brasenose College, Oxford, where he obtained a double first in Mods and Greats. He was influenced in the study of history and archaeology by Michael Holroyd, his Brasenose tutor; R. G. Collingwood, the renowned authority on Roman Britain; and F.G. Simpson, Director of Field Studies at Durham, and a great influence on Birley vis-à-vis the art and science of excavation. Under the direction of F.G. Simpson, Birley began excavating at Hadrian's Wall in 1927 while an undergraduate. Birley's first archaeological dig occurred at Birdoswald. After graduating from Oxford, Birley worked for a short time for the Society of Antiquaries of London acting as a construction site observer for the Society. It was during this period in London that Birley befriended Mortimer Wheeler of the London Museum engendering in Birley a lifelong interest in "imported Roman 'samian' pottery with moulded decoration." A chance discovery in 1929 of two inscription stones in the praetentura at Birdoswald led Birley to suggest redating the Wall periods. This discovery, and Birley's redating, impacted the study of Roman Britain tremendously inasmuch as it "has formed the basis of all subsequent work on the chronology of Hadrian's Wall." In 1929, having developed a keen interest in the Wall through his excavations, Birley succeeded in buying the Clayton Estate at Chesterholm that had belonged to Anthony Hedley, the 19th century antiquary. Nearby Houselands would also come up for sale; however, Birley could not afford the purchase of both properties, although he would eventually excavate them both. Chesterholm-Vindolanda would eventually be converted into a museum and research centre, in which the spectacular finds from Vindolanda would be displayed and interpreted. In 1931, at the age of 24, he became a lecturer at the University of Durham, "already with an impressive record of excavation on Hadrian's Wall, partly under the guidance of F.G. Simpson," whom he would replace upon the latter's stepping down as Director of Field Studies. Through trips to Germany and Switzerland, he began to expand his expertise in samian pottery, epigraphy, and his primary field of interest, the Roman army. As a consequence of these trips abroad, his continental reputation grew. In 1943, he was promoted to reader. In 1947, he became Vice Master of Hatfield College. In 1949, he was promoted to Master of Hatfield. He would finish his academic career having been Master of Hatfield College ; Professor of Romano-British History and Archaeology ; Head of the Department of Archaeology ; and Dean of the Faculty of Social Sciences. In 1949, Birley established the first International Congress of Roman Frontier Studies. During his tenure, he was president of all three of the local archaeological societies. Also, during his years at Durham, he would influence such notable students as George Jobey and John Gillam, each of whom would go on to hold prestigious university teaching positions. One student recalls that Birley was "incredibly generous and trusting in … … support to students." Birley would become known as an expert on the Roman army. For his "practical experience of the ways in which modern armies work," he was inspired in asking questions about organisation and methods of the Roman army. His expertise and work in this field served to make Birley the founder of the "Durham School" of archaeology having attracted
several highly-talented and influential postgraduate students to the Department, whose research has … "epitomised, and to a large degree set the agenda for, British work on the Roman military for much of the twentieth century." Often known collectively as the "Durham School," they include David Breeze, Brian Dobson, the late Mike Jarrett, Valerie Maxfield and John Wilkes.
Birley's influence is still very much alive in the Archaeology Department at Durham University: "Durham Archaeology is still founded on the vision and determination of its early pioneers, notably Eric Birley and … … influence lives on in successive generations of staff and students." In Birley's obituary, former Durham PhD student and Emeritus Yates Professor of Greek and Roman Archaeology at the Institute of Archaeology, John Wilkes wrote in The Independent that "Eric Birley dominated the study of the Roman army, of Hadrian's Wall and Roman frontiers in general for much of his 40 years as a teacher at Durham University, interrupted only by six years of war service, when he was engaged in the study of the German army for Military Intelligence."
In 1934, he married Margaret Isabel Goodlet, a former student of his, a marriage that would last over 60 years until his death. Their two sons, Robin and Anthony, would both become eminent in their field, and would continue their father's work at Vindolanda. The elder, Robin, was named after Birley's great influence, R.G. Collingwood, while the younger, Anthony, was named after Anthony Hedley, the former owner of Chesterholm. While still excavating at Chesterholm-Vindolanda to this day, the Birley family no longer reside there having left Chesterholm for Durham in 1950.