Hoernlé was born in Secundra, Agra, British India on the 14th November, the son of a Protestant missionary reverend, from a German family who had provided a number of recruits for the Church Missionary Society in the area. He descended from a long line of missionaries which included both linguists and revolutionaries; his father Christian Theophilus Hoernlé (1804–1882) translated the gospels into Kurdish and Urdu, Hoernlé was therefore a British subject by birth; he was sent to Germany and his grandparents, at age 7, and was initially educated there.
Hoernlé attended school in Switzerland, after completing theological studies in Schönthal and the University of Basle later moving to London and studying Sanskrit under Theodor Goldstucker. He returned to India in 1865, teaching first at the Benares Hindu University and later at the University of Calcutta. Eventually, Hoernlé was to lead the Asiatic Society of Bengal and retire to Oxford. He died on November 12 1918 during the global Spanish Flu pandemic. 
Hoernlé spent nearly his entire working life engaged in the study of Indo-Aryan languages and is perhaps best known for his decipherment of the Bower Manuscript collected by Hamilton Bower in Chinese Turkestan. He was an early scholar of Khotanese. Various super-powers were engaged in a competition to discover various archeological artifacts in Central Asia. Between 1895 and 1911, the Government of India gave Hoernlé a variety of manuscripts for him to decipher. He also took it upon himself to catalogue the Brahmi manuscripts that were sent to him by Aurel Stein. This is now referred to as the Hoernlé collection.
His work on the languages of Bihar in Comparative Grammar of the Gaudian Languages (1880) was followed up by George Abraham Grierson. Grierson also adopted his two-wave theory of the Indo-Aryan migration.
Hoernlé was deceived by forgeries obtained by George Macartney and created by Islam Akhun. After a preliminary report in 1897, he published A Collection of Antiquities from Central Asia on these productions. The truth about these manuscripts was revealed to him by the explorer Sir Aurel Stein. Hoernlé was deeply dismayed by his error, and attempted to acquire and destroy copies of his small book on these forgeries. Hoernlé's reputation survived this revelation, however, and his obituaries tactfully omitted the incident.
In addition to his palaeographical and codicological work, Hoernlé published an important series of editions and studies on the history of medicine in South Asia, including a magisterial edition, translation and study of the Bower Manuscript.
He was appointed a Companion of the Order of the Indian Empire (CIE) in 1897.
- A history of India, Cuttack: Orissa Mission Press 1907
- Studies in the medicine of ancient India, Part I. Osteology, Or The Bones of the Human Body, Oxford, Clarendon Press 1907
- Manuscript remains of Buddhist literature found in Eastern Turkestan; facsimiles with transcripts, translation and notes, Oxford, Clarendon Press 1916
- The Bower Manuscript, Calcutta 1897
- Sims-Williams, Ursula (n.d.). Rudolf Hoernle and Sir Aurel Stein (PDF). London: Iranian Collections, British Library.
- Sims-Williams, Ursula (2006). The papers of the Central-Asian scholar and Sanskritist Rudolph Hoernle. In: Karashima, Seishi; Wille, Klaus. Buddhist Manuscripts from Central Asia: The British Library Sanskrit Fragments, Volume I, Tokyo, p. 1. ISBN 4-9980622-9-8 Internet Archive
- Hopkirk, Peter (1980). Foreign Devils on the Silk Road: The Search for the Lost Cities and Treasures of Chinese Central Asia. Amherst: The University of Massachusetts Press. ISBN 0-87023-435-8.
- Ray H. Greenblatt. The Vanishing Trove: Reviled Heroes; Revered Thieves. The Chicago Literary Club. October 2, 2000
- Sweet, William. "Hoernlé, (Reinhold Friedrich) Alfred (1880–1943)". Oxford Dictionary of National Biography (online ed.). Oxford University Press. doi:10.1093/ref:odnb/94419. (Subscription or UK public library membership required.)
- Haigh, John D. "Grierson, George Abraham". Oxford Dictionary of National Biography (online ed.). Oxford University Press. doi:10.1093/ref:odnb/33572. (Subscription or UK public library membership required.)
- George Erdösy (1995). The Indo-Aryans of Ancient South Asia: Language, Material Culture and Ethnicity. Walter de Gruyter. p. 37. ISBN 978-3-11-014447-5. Retrieved 24 October 2012.
- Susan Whitfield (editor), Dunhuang Manuscript Forgeries (2002), British Library, pp. 5–8.
- "University intelligence". The Times (36695). London. 19 February 1902. p. 7.