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Winstedt was born in Oxford, educated at Magdalen College School and New College, Oxford, from which he received an MA. In 1902 he became a cadet in the Federated Malay States Civil Service, and was posted to Perak where he studied Malay language and culture. In 1913 he was appointed District Officer in Kuala Pilah, and in 1916 appointed to the education department. In 1920 Winstedt received his DLitt degree from Oxford.
He served as first President of Raffles College, Singapore, 1928-1931. During his presidency, he also served as acting Secretary to the High Commissioner, 1923; Director of Education, Straits Settlements and Federated Malay States (FMS), and member of Legislative Council, Straits Settlements, 1924–1931; member of the FMS Federal Council, 1927-1931.
After a term as General Adviser to Johore, 1931–1935, Winstedt retired from the Malayan Civil Service and was appointed lecturer, then reader, and ultimately Honorary Fellow, in Malay at the School of Oriental Studies, where he also served as a member of the Governing Body, 1939-1959. During World War II, he broadcast in Malay to Japanese-occupied Malaya. He retired from active teaching in 1946.
Winstedt served on numerous boards and advisory groups, most notably the Royal Asiatic Society of which he was repeatedly the president and a Gold Medallist in 1947; the Association of British Malaya, of which he was president in 1938; the Colonial Office Advisory Committee on Education, 1936–1939; and the Royal India Society. He was a Fellow of the British Academy, and an Honorary Member of Southeast Asia Institute, Royal Batavian Society, and Kon Instituut voor TaalLanden Volkenkunde.
He was instrumental in preserving several works of Malay literature including The Malay Annals as well as producing important works regarding the Malays and their language such as A History of Malaya and A Dictionary of Malay Language. According to Australian Journal of Politics and History, "Winstedt was the first British scholar to make a systematic survey of Malay material for historical purposes, and laid the true foundation of a scientific approach to the writing of Malayan history."
He also played an important role in the Malayan and Singaporean education system. Specifically, he was interested in educating the Malays. Upon his suggestion, Sultan Idris Training College was established in 1922 with the purpose of producing Malay teachers. In 1997, the Malaysian government upgraded the institution into a university. Winstedt was awarded the Order of the British Empire, Order of St Michael and St George for his contributions by the British sovereign.
He was made Knight Commander of the Order of the British Empire in 1935, and received an Honorary LLD (Malaya) in 1951.
Winstedt's papers are archived at the School of Oriental and African Studies.