Son of the rector of Copdock, Suffolk, and grandson of the 5th Lord Walsingham, he was educated at Eton College and became fluent in French and German.
Nigel de Grey joined the Royal Naval Volunteer Reserve and served in Belgium.
Later in 1917, de Grey was promoted, assigned to run the NID's Mediterranean section in Rome, to liaise with the director of Italian naval intelligence and to focus on Austrian cipher traffic.
In World War II Nigel de Grey was assigned to the "Government Code and Cypher School" (GC&CS) at Bletchley Park, where he concentrated on German traffic encrypted on the Enigma cipher machine.
In September 1941 he provided a report to the Prime Minister with the first references from German authorities to their own police battalions systematically levelling villages and removing their populations.