Walter H. Atherstone was the youngest child of Dr W.G. Atherstone* of Grahamstown, and younger brother of Guybon D. Atherstone*. He qualified as Bachelor of Medicine (MB) and Master of Surgery (CM) at the University of Aberdeen, Scotland, in 1887. He was licensed to practice in the Cape Colony in May 1888 and was appointed during the same month as district surgeon of Bathurst, Eastern Cape, and medical officer of the Kowie convict station. In August 1889 he was appointed acting surgeon superintendent of the newly established Port Alfred asylum, a name later changed to the Kowie asylum. The institution was housed in vacant convict barracks that were quite unsuitable for the purpose. In November 1893 Walter became medical superintendent of the asylum. From 1896 to 1901 he served as acting senior medical officer on Robben Island, but thereafter again became medical superintendent at Port Alfred and remained in this post until 1920. His son, Dr Harold Damant Atherstone, joined him in his practice after qualifying in 1915. After losing an eye Walter gave up his general practice and devoted all his energies to the asylum which from 1908 admitted chronic cases only. He remained in Port Alfred after his retirement for the rest of his life. He was married to Fanny Harrison, with whom he had a son.
In 1892 Walter Atherstone donated fishes and other specimens from Port Alfred to the Albany Museum in Grahamstown. Many years later, in 1912, he presented the museum with some blocks of limestone containing fossils of the mollusc genus Turbo.