Born the second son of the minor court noble Horikawa Yasuchika, he was adopted by Iwakura Tomosada. As sonnō jōi sentiment intensified, he championed the marriage of Princess Kazunomiya to the shogun and became a central figure of the kobu gattai faction—only to incur the wrath of loyalist expulsion factions, resulting in his banishment from Kyoto from 1862 to 1867. After his return he switched to the anti-shogunate side and played a central role in the Imperial Restoration Edict of 1867. In the Meiji government he became Right Minister and effectively the most powerful figure, spearheading major policies such as the return of domains and their abolition. From 1871 to 1873 he served as ambassador plenipotentiary of the Iwakura Mission, visiting twelve Western nations and conducting exhaustive surveys of their political, economic, educational, and military institutions. After returning home he voted down the proposal to conquer Korea and established the priority of domestic governance. He was deeply involved in creating the peerage system and the cabinet structure, laying the groundwork for the Meiji Constitution. In his final years he suffered from laryngeal cancer and died at fifty-eight on July 20, 1883.

A flexible and wily politician with superb insight into the times. He stayed at the center of power by shifting from kobu gattai to overthrowing the shogunate. Pragmatic, he valued reality over ideology.

The fruits of the Iwakura Mission directly shaped Meiji Japan's modernization policies and determined the direction of civilization and enlightenment. He left an enormous contribution to the institutional design of the modern state, including the Meiji Constitution, the cabinet system, and the peerage system.