Varley was born at Hackney, then a village north of London, on 21 November 1781. He was a younger brother of John Varley, a watercolour painter and astrologer, and a close friend of William Blake. He was educated by his uncle, a scientific instrument maker, and under him acquired a knowledge of the natural sciences. Around 1800, he joined his brother in a tour through Wales, and began the study of art. He was soon engaged in teaching drawing. From 1803 to 1859 he was an occasional exhibitor at the Royal Academy and he also contributed regularly to the displays of the Water-Colour Society, of which, in 1803, he was one of the founders, and of which he continued a member until 1821. He died in Hampstead on 2 October 1873.
Varley's works consist mainly of carefully finished classical subjects, with architecture and figures. He published a series of etchings of boats and other craft on the River Thames, and during his life as an artist he continued deeply interested in scientific pursuits. For his improvements in the camera lucida, the camera obscura and the microscope he received the Isis Gold Medal of the Society of Arts and at the Great Exhibition he gained a medal for his invention of the graphic telescope.
- Monkhouse, William Cosmo (1899). "Varley, Cornelius". In Lee, Sidney. Dictionary of National Biography 58. London: Smith, Elder & Co. pp. 148, 149.