After receiving a private education in Saint Petersburg[4] he attended the Gouvernements-Gymnasium (Grammar School of the Governorate) in Reval[3][4] and in 1865 he enrolled in the University of Dorpat to study philology,[5] where he was a student of Leo Meyer who in the same year had been appointed as the university's professor of Germanistics and Comparative philology.

In 1871 Anderson worked as an hourly paid teacher at the Gymnasium in Dorpat before taking up a post as teacher for classical languages at the Gymnasium in Minsk (now in Belarus) in 1872,[5] but he continued his studies of Finno-Ugric languages in his spare time.

Still working as a teacher in Minsk, he continued his research, and in 1891 he gained a Magister degree in Comparative Linguistics.

As a professor he had the rank of Статский советник (State Councillor), meaning that he held personal nobility in the Imperial Russian hierarchy.

After his condition improved in early 1905 he visited his sister in Narva, where he fell ill with pleurisy and died shortly thereafter.