Born at Stoughton in Worcestershire, and educated at Trinity College, Oxford, Derham was ordained in 1682. He was appointed to the living of Upminister where he remained for the rest of his life.

Derham is best known for his attempt to measure the speed of sound. Martin Mersenne in 1640 had claimed a value of 1038 ft. per sec. while Newton, in the first edition of Principia (1687), had calculated it to be 968 ft. per sec. In 1705 Derham observed from the tower of his Upminiser church the flash of cannons being fired 12 miles away across the Thames at Blackheath. By timing the interval between the flash and roar of the cannon he was able to calculate the speed of sound to be 1142 ft. per sec., a result in good agreement with the 1130 ft. per sec. at 20°C given in modern textbooks. In the second edition of his Principia (1713), Newton revised his calculation in the light of Derham's published results.

Derham was also the author of two immensely popular works: Physico-theology (1713) and Astro-theology (1715). Based on his Boyle lectures, they set out to show that the basic facts of Newtonian mechanics and cosmology were convincing evidence for the “being and attributes of God.”

Also known as an editor, Derham published a number of posthumous works of John Ray as well as The Philosophical Experiments (1726) of Robert Hooke.