Born near Calcutta, India, in 1814 and raised and educated in England, Anderson joined the Hudson’s Bay Company in 1831. Initially posted at Lachine, Lower Canada, he was transferred to Fort Vancouver in 1832 and later spent a number of years working at various forts and posts in New Caledonia (present day north-central British Columbia) including Fraser Lake and Fort George. He 1837 he married Eliza Birnie, with whom he had thirteen children. In 1842 he was appointed to Fort Alexandria on the Fraser River. Early in 1846, anticipating a boundary settlement unfavourable to their interests in North America, the Hudson's Bay Company directed Anderson to locate an all-British route between Fort Langley and the forts of the interior in the event that the 49th parallel became the boundary between British North America and the United States. Over the course of the next three years, Anderson led exploring parties over numerous routes between Forts Langley and Kamloops before eventually rejecting the western-most route through Lillooet and Harrison Lake and the eastern-most route via the Tulameen and Similkameen Rivers. In 1848 he was posted to Fort Colville in present day Washington State. Anderson’s final posting was to Fort Vancouver in 1851 where he served as second in command until 1854 when he retired from active service with the Company.
Rising in the ranks of the Hudson’s Bay Company to the position of Chief Trader, Anderson also held a number of government positions and titles after his retirement from the Company. Upon moving to Victoria in 1858 he was appointed postmaster of that city and later collector of customs for British Columbia. He also served as dominion inspector of fisheries for the province in 1876 and accepted a position as a member of the dominion-provincial joint commission on Indian land in British Columbia that same year. He wrote numerous essays and articles on the history of the province. He died in Saanich in 1884.