Friedman's first contact with the science of cryptology was through his acquaintance with a wealthy merchant George Fabyan. He had been hired by Fabyan for genetics research of his crops and livestock, but was subsequently enlisted into Fabyan's investigation of the authorship of the works of Shakespeare. Whilst carrying out this investigation he met researcher Elizebeth Smith whom he married in May 1917.

The now Elizebeth Friedman became a renowned cryptologist herself quite independently of her husband. Notably she worked with the Coast Guard and cracked the encrypted messages of bootleggers during the era of Prohibition.

The Friedman's left the employ of George Fabyan in 1920. William Friedman then started the association with the US military that lasted throughout his career. Firstly his role was the development of encryption processes for the Signal Corps. But later he was appointed as the first director of the newly founded Signal Intelligence Service. He had built the organisation up during peacetime despite underfunding, thus the US was prepared for the cryptographic challenges of World War II after the bombing of Pearl Harbour. Friedman led the team that cracked the Japanese diplomats' cipher machine known as Alphabetical Typewriter '97 (codenamed Purple by the Americans). The work of the SIS is not as widely known as that of Bletchley Park and yet was instrumental in the victory over Japan. The stress of the effort to crack Purple caused William Friedman to suffer a nervous breakdown and he was off work for several months.

After the war Friedman maintained his relationship with Military Intelligence and became a founder member of the National Security Agency in 1952. Officially retiring in 1955 he continued as a consultant to the agency until his death in 1969. Considered by many to be the godfather of modern cryptography, much of his work with the NSA still remains classified. One final detail is that he was responsible for the invention of the word Cryptanalysis to denote the cracking of encrypted messages by an unauthorised third party.