The second son of Lionel de Rothschild and Baroness Charlotte von Rothschild of the prominent Rothschild family.
At the age of 21 Alfred took up employment at the N M Rothschild Bank at New Court in London, where he learnt the business of banking from his father and made valuable contacts in European banking circles. In 1868, at the age of 26, Alfred became a director of the Bank of England, a post he held for 20 years, until 1889. In 1892 he was one of those who represented the British Government at the International Monetary Conference in Brussels.
Alfred was a trustee of the National Gallery, and a founder trustee of the Wallace Collection. The strength of his personal collection of paintings lay in his ensemble of English female portraits of the 18th century. Among the Gainsboroughs were Mrs Beaufroy, Mrs Meares, Mrs Lowndes Stone-Norton and Mrs Villebois, but his favourite was a portrait by Joshua Reynolds of Lady Bamfylde after whom he named a room at Halton.
Alfred was an enthusiastic collector, and began buying paintings in his early twenties, continuing until his death in 1918. Preferring to avoid auctions, he bought mainly through friends and family. He purchased some Dutch and Flemish paintings but clearly favoured the French and English 18th-century schools. Boucher, Greuze, Lancret, Pater and Watteau all featured among his collection.