William Lee developed a tobacco commission business in London after earlier work in Virginia. His marriage to Hannah Ludwell also brought responsibility for the Green Spring estate, which he attempted to manage from overseas. He joined the Haberdashers' Company and entered City politics, serving as sheriff and then alderman while supporting colonial objections to British policy.

The Revolution turned commercial and political connections into diplomatic assignments. In 1777 Congress appointed Lee a commercial agent and commissioner to the courts of Vienna and Berlin. He worked from continental Europe, including Frankfurt, but neither Austria nor Prussia received him as an accredited American representative. His disputes with Silas Deane and the other American commissioners formed part of the factional struggle over the conduct and financing of foreign affairs. Congress terminated his mission in 1779.

Lee also participated in negotiations with Amsterdam merchants over a proposed commercial agreement. The unofficial draft later became evidence in Britain's dispute with the Dutch Republic, although it was never a ratified national treaty. After the war he returned to Virginia in 1783 and took up residence at Green Spring. He served in the state Senate and later as sheriff of James City County, while repairing the estate and directing its enslaved workforce. Failing eyesight limited his later activities. He died at Green Spring in 1795.