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He was born in London, the son of architect James Thomas Knowles and himself trained in architecture at University College and in Italy. He designed, amongst other buildings, three churches in Clapham, Lord Tennyson's house at Aldworth, the Thatched House Club, the Leicester Square garden (as restored at the expense of Baron Albert Grant), and Albert Mansions, Victoria Street, Westminster. However, his preferences led him simultaneously into a literary career. In 1860 he published The Story of King Arthur. In 1866 he was introduced to Alfred Lord Tennyson and later agreed to design his new house, Aldworth, on condition there was no fee; this led to a close friendship, Knowles assisting Tennyson in business matters and, among other things, helping to design scenery for The Cup when Henry Irving produced that play in 1880.
Knowles became intimate with a number of the most interesting men of the day, and in 1869, with Tennyson's cooperation, he founded the Metaphysical Society, the object of which was to attempt some intellectual rapprochement between religion and science by getting the leading representatives of faith and unfaith to meet and exchange views. Members included Tennyson, Gladstone, W. K. Clifford, W. G. Ward, John Morley, Cardinal Manning, Archbishop Thomson, T. H. Huxley, Arthur Balfour, Leslie Stephen, and Sir William Gull. The society formed the nucleus of the distinguished list of contributors who supported Knowles in his capacity as an editor.
In 1870 he succeeded Dean Alford as editor of the Contemporary Review, but left it in 1877 owing to the objection of the proprietors to the insertion of articles (by W. K. Clifford notably) attacking Theism and founded the Nineteenth Century (to the title of which, in 1901, were added the words And After). Both periodicals became very influential under him, and formed the type of the new sort of monthly review which came to occupy the place formerly held by the quarterlies. Inter alia it was prominent in checking the Channel Tunnel project, by publishing a protest signed by many distinguished men in 1882. In 1904 he received the honour of knighthood. He was a considerable collector of works of art. He was married twice, (1) in 1860 to Jane Borradaile, (2) in 1865 to Isabel Hewlett. He died at Brighton and was buried at the Brighton Extra Mural Cemetery.