Bayly was born in Brighton, the youngest of four children of a barrister. At an early age, she lost both her parents and she spent her youth with an uncle in Surrey and in a Brighton private school. Bayly never married and she seems to have spent her adult life living with her two married sisters and her brother, a clergyman in Bosbury in Herefordshire. In 1879, she published her first novel, Won by Waiting, under the pen name of "Edna Lyall" (apparently derived from transposing letters from Ada Ellen Bayly). The book was not a success. Success came with We Two, based on the life of Charles Bradlaugh, a social reformer and advocate of free thought. Her historical novel In the Golden Days was the last book read to John Ruskin on his deathbed. Bayly wrote eighteen novels.