Beat butter at medium speed with an electric mixer until fluffy; gradually add sugar, beating well. Add eggs, 1 at a time, beating until blended after each addition.
Combine flour, baking powder, and salt; add to butter mixture alternately with milk, beginning and ending with flour mixture. Beat at low speed until blended after each addition. Stir in walnuts, lemon rind, and lemon juice. Pour batter into a greased and floured 9- x 5-inch loafpan.
Bake at 350° for 50 to 55 minutes or until a wooden pick inserted in center comes out clean. Cool in pan on a wire rack 10 to 15 minutes; remove from pan, and cool completely on wire rack.