The new Meiji government considered that Katsura displayed great talent, and sent him to Germany to study military science. He served as military attaché at the Japanese embassy in Germany from 1875 - 1878 and again from 1884 - 1885. On his return to Japan, he was promoted to major general. He served in several key army positions, and in 1886 was appointed Vice-Minister of War.

During the First Sino-Japanese War (1894 - 1895) he commanded the IJA 3rd Division under his mentor, Field Marshal Yamagata Aritomo. During the war, his division made a memorable march in the depth of winter from the north-east shore of the Yellow Sea to Haicheng, finally occupying Niuchwang, and effecting a junction with the IJA 2nd Army which had moved up the Liaotung peninsula.

After the war, he was elevated with the title of shishaku (viscount) under the kazoku peerage system. He was appointed 2nd Governor-General of Taiwan from 2 June 1896 to October 1896.

In successive cabinets from 1898 to 1901, he served as Minister of War.

Katsura Tarō served as the 11th, 13th and 15th Prime Minister of Japan. He remains the longest-serving Prime Minister of Japan to date.

Katsura became Prime Minister for the first time on 2 June 1901 and retained the office for four and a half years to 7 January 1906, which was a record in Japan at that time. During his four year first term Japan emerged as a major imperialist power in East Asia. In terms of foreign affairs, it was marked by the Anglo-Japanese Alliance of 1902 and victory over Russia in the Russo-Japanese War of 1904 - 1905. It is a myth that his conversations with an American official in 1905 gave Japan permission to take control of Korea. During this term, Katsura received the Grand Cross of the Order of St Michael and St George from King Edward of Great Britain, and was elevated to the rank of marquess by Emperor Meiji.

In terms of domestic policy, Katsura was a strictly conservative politician who distanced himself from the Diet and party politics. His political views mirrored that of Yamagata Aritomo, and he saw his sole responsibility to the Emperor. He vied for control of the government with the Rikken Seiyukai, the majority party of the lower house, headed by his arch-rival, Marquess Saionji Kinmochi.

In January 1906, Katsura resigned the premiership to Saionji Kinmochi over controversy and unpopularity of the Treaty of Portsmouth (1905) ending the war between Japan and Russia. However, his resignation was part of a “back door deal” brokered by Hara Takashi to alternate power between Saionji and Hara. On 1 April 1906, he was awarded the Grand Cordon of the Supreme Order of the Chrysanthemum.

Katsura returned as Prime Minister from 14 July 1908 to 30 August 1911. His second term was noteworthy for the Japan-Korea Annexation Treaty of 1910. Katsura was increasingly unpopular during his second term over public perception that he was using his office to further his personal fortune, and the interests of the military (gunbatsu) over the welfare of the people. He also faced growing public dissatisfaction over the persistence of the hanbatsu domainal based politics. After his resignation, he became a kōshaku (prince), Lord Keeper of the Privy Seal of Japan and one of the genrō.

Katsura's brief reappointment again as Prime Minister again from 21 December 1912 to 20 February 1913 sparked widespread riots in what became known as the Taisho Political Crisis. His appointment was viewed as a plot by the genrō to overthrow rule by the Constitution. However, rather than compromising, Katsura created his own political party, the Rikken Doshikai in an effort to establish his own support base. However, faced with a non-confidence motion (the first successful one in Japanese history) and the loss of the support of his backers, he was forced to resign in February 1913. He was succeeded by Yamamoto Gonnohyoe and the Diet was held by his new Rikken Doshikai party.

Katsura died eight months later on 10 October 1913, aged 65.