He graduated at Franklin and Marshall College in 1889, and at the Lutheran Theological Seminary in 1892; was ordained to the Lutheran ministry in the latter year; was fellow in Assyrian and instructor in Hebrew at the University of Pennsylvania, to which, after being instructor in Old Testamenttheology at the Chicago Lutheran Seminary in 1895-99, he returned as lecturer in Semitic archæology. He was assistant professor of Semitic philology and archæology there in 1903-09, and full professor for one year; and in 1910 became Laffan Professor of Assyriology and Babylonian Literature at Yale University. His most important publications were Babylonian business and legal documents, especially Business Documents of Murashû Sons of Nippur (1898; et seq). Clay also wrote "Personal Names," an article in Studies in Memory of W. R. Harper from Cuneiform Inscriptions of the Cassite Period (1912), and in an article (1908) on Aramaic endorsements on these documents he points out the value of Aramaic transliterations of Babylonian proper names. His Amurru, the Home of the Northern Semites (1909) shows the non-Babylonian origin of Israelite culture and religion. He served as Librarian of the American Oriental Society from 1913 to 1924, and as its President in 1924-25. He first visited Iraq in 1920, and returned in 1923 as the Commissioner for the Society’s Schools in the Orient (ASOR) to formally open the Society' new School in Baghdad, where he remained as its first annual Visiting Professor and Deputy Director.