His family was Austrian in origin, but had been in the service of the Tsars for over 100 years, and had long since converted to Orthodoxy. Von Kaufman entered the military engineering field in 1838, served in the campaigns in the Caucasus, was promoted to the rank of colonel, and commanded the sappers at the siege of Kars in 1855. On the capitulation of Kars he was deputed to settle the terms with General William Fenwick Williams.
In 1861, he became director-general of engineers at the War Office, assisting General D.A. Miliutin, the Minister of War, in the reorganization of the army. Promoted lieutenant general in 1864, he was nominated adjutant-general and Governor of the military conscription of Vilna, where at that time the Tsarist state had begun a policy of expropriating the Polish aristocracy in an attempt to break its influence in the countryside.
In 1867, he became Governor-General of Turkestan, and held the post until his death, making himself a name in the expansion of the empire in Central Asia. The Khanate of Kokand north of the Syr Darya had already been annexed to Russia, and the independence of the rest of that country became merely nominal. He accomplished a successful campaign in 1868 against the Emirate of Bukhara, capturing Samarkand and gradually subjugating the whole country.
In 1872-1873, he attacked Khanate of Khiva, took the capital, and forced the khan to become a vassal of Russia. Then followed in 1875 by the campaign against Kokand, in which Kaufmann defeated the usurping khan, Nasreddin, after an anti-Russian uprising against the previous ruler, Khudoyar. The fiction of Kokand's independence was ended, and the remaining rump of the Khanate in the Ferghana Valley was annexed. This rapid absorption of these khanates brought Russia into proximity to Afghanistan, and the reception of Kaufman's emissaries by the Sher Ali Khan was a main cause of the British war with Afghanistan in 1878.
The various temporary statutes under which Turkestan was administered from 1867-1886 gave Von Kaufman a great deal of latitude in policy. Initially he was allowed to carry out negotiations with neighbouring states on his own account, to establish and oversee the expenditure of the budget, set taxes and establish the privileges of Russian subjects in the General-Gubernatorstvo: he also had the power to confirm and revoke death sentences passed in the Russian military courts. Nowhere else in the Russian Empire did a Military Governor-General have this kind of independence from central control, and nowhere else was there such obvious pessimism about the region’s potential for integration into the main body of the Empire. Isolated geographically from European Russia by an expanse of Steppe that took two months to cross, it was isolated still more decisively in the minds of Tsarist officials by its dense, ancient and settled Islamic culture. In its early years under Von Kaufman, Turkestan was thus also administratively isolated, with many distinctive institutions within the military bureaucracy, that was loosely superimposed on a largely unreformed native administration.
Although Kaufmann was unable to induce his government to support all his ambitious schemes of further conquest, he was still in office when General Mikhail Skobelev was despatched from Tiflis in 1880 and 1881 against the Turkomans of the Akhal-Teke Oasis, but died suddenly at Tashkent in May 1882, shortly before the annexation of Merv. General Cherniaev, the conqueror of Tashkent in 1865, was appointed as his successor.