Altun Tash was originally a slave commander serving the Ghaznavid Sebük Tigin. In 1008 he played a leading role in a battle against the Karakhanids at Sharkhiyan near Balkh, in which the Ghaznavids were victorious. By 1011 he had been made governor of Herat by Sebük Tigin's son, Mahmud.
In 1017 Mahmud conquered Khwarazm from its Ma'munid rulers, and made Altun Tash its governor. Altun Tash's tenure as Khwarazm-Shah consisted of preventing the Oghuz and Qarluqs from making raids into the region. He also participated in Mahmud's 1025 campaign against the Karakhanid ruler of Transoxiana, 'Ali-tigin, in which Samarkand was temporarily occupied, and was present at the meeting between Mahmud and his ally, the Karakhanid ruler of Kashgar, Qadir-khan Yusuf.
In 1032 Mahmud's successor, Mas'ud struck a new alliance with Qadir-khan Yusuf against 'Ali-tigin, who had recovered his realm shortly after the Ghaznavids had left Transoxiana. Mas'ud ordered Altun Tash to undertake a campaign against 'Ali-tigin, and he dutifully responded, invading Transoxiana. He met up with the Karakhanid army near Bukhara and engaged them in battle, but was mortally wounded. His lieutenant Ahmad Sirazi was able to conclude a peace with 'Ali-tigin, and shortly afterwards Altun Tash died.
Although Altun Tash never wavered in his loyalty to the Ghaznavids, the distance which Khwarazm was from Ghazna, as well as the fact that much of his army consisted of Turkish mercenaries recruited from abroad, caused Mahmud and Mas'ud to become distrustful of him. For this reason Altun Tash never visited the sultan's court, and it was also probably for this reason that his son, Harun was not made Khwarazm-Shah following his death, although he was effectively ruler of Khwarazm.