Born in 1857 in Shiogama village, Isawa District, Mutsu Province (now Oshu, Iwate Prefecture), into a family retainers of the Rusu clan in the Sendai domain. A graduate of the Sukagawa Medical School, he practiced medicine in Nagoya before entering the Home Ministry's Hygiene Bureau. In 1892 he became director of the Hygiene Bureau, establishing Japan's modern public-health system. In 1898, on the recommendation of Kodama Gentaro, he took up the post of civil administrator under the Governor-General of Taiwan, leading Taiwan's modernization with sugar industry promotion, land surveys, and sanitary improvements. In 1906 he became the first president of the South Manchuria Railway (Mantetsu) and built an integrated management model combining railways, coal mines, and steel. He served as Minister of Communications and Minister of Home Affairs, and in 1920 became Mayor of Tokyo. He proposed bold city planning only to be frustrated by the assembly. Just after the Great Kanto Earthquake of 1923, as Home Minister and President of the Imperial Capital Reconstruction Board, he drafted the 'Imperial Capital Reconstruction Plan,' laying the foundations of the boulevards, parks, and land readjustment that form the skeleton of today's Tokyo. From 1919 to 1929 he served as the third president of Takushoku University. He taught the 'three rules of self-reliance': do not rely on others, take care of others, and seek no reward. In 1929 he died in Okayama of a cerebral hemorrhage at age 71.

A statesman of vast conception — so much so that he was nicknamed the 'big-cloth-spreader' — he put forward plans looking a century ahead without fearing opposition. Of a physician's background, he had the perspective of 'diagnosing the state as a single body,' and there ran a consistent thought through his public health, city planning, and colonial administration. Indifferent to money and rank, he left no private fortune, and his maxim was: 'To leave money is the lowest; to leave enterprise is middling; to leave people is the highest.'

Goto's Imperial Capital Reconstruction Plan of 1923–24 was scaled back by the assembly, yet the trunk roads, earthquake-reconstruction bridges, elementary school sites, and great parks (Sumida Park, Hamacho Park, and others) remain today the base of life for the people of Tokyo. His modernization works in Taiwan and Manchuria, while containing a colonialist aspect, built legacies in land survey and infrastructure that remained into the postwar era. Takushoku University was raised to the status of a full university (1922) during his tenure. As the first chief of the Boy Scouts of Japan and first head of the broadcasting body that became NHK, he also left his footprints on modern Japanese culture.