Born in Kawabe Village, Kayo District, Bitchu Province (present-day Okayama City, Okayama Prefecture). After studying at Keio Gijuku and Tokyo Senmon Gakko (Waseda), he joined the Freedom and People's Rights Movement and pursued a career in politics. Together with Itagaki Taisuke, he led the Liberal Party and later the Constitutional Nationalist Party. Called the "Guardian of Constitutional Government," he consistently upheld parliamentary politics and resisted clique and military power throughout his life. He became president of the Rikken Seiyukai in 1929 and in 1931 became the 29th Prime Minister. When the Manchurian Incident broke out (1931), he criticized the military's independent action and was reluctant to recognize Manchukuo, believing "things can be worked out through dialogue." On May 15, 1932, young naval officers stormed the Prime Minister's residence and shot Inukai dead, shouting "No need for discussion!" in response to his "Talk it through" approach (the May 15 Incident). He died at 77. This incident heralded the end of party government and became a historical turning point that opened the path to militarism. His last words, "Things can be worked out through dialogue," are still remembered as a symbol of dialogue and democracy.

An uncompromising believer in parliamentary politics who refused to yield to military pressure and consistently upheld the spirit of dialogue with "Things can be worked out through discussion." His formation of a cabinet at 76 was a record for the oldest at the time, and he never lost his passion for politics even in his final years.

His death in the May 15 Incident symbolized the end of Japanese party government. The phrase "Things can be worked out through dialogue" is widely remembered by Japanese people as a symbol of democracy and the spirit of dialogue. A memorial museum at his birthplace remains in Okayama Prefecture.