Khankhoje was born in November 1884 to a Marathi Brahmin family at Wardha, where his father worked as a petition-writer. Young Khankhoje spent his childhood in Wardha, where he completed his primary and middle school education before moving to Nagpur for higher education. He was at the time inspired by the nationalist work of Bal Gangadhar Tilak. At some time in the first decade of 1900s, Khankhoje left India on a voyage that ultimately saw him settle in the United States. Here he enrolled in the Oregon Agricultural College (now called Oregon State University), graduating in 1911. His earliest nationalist work abroad dates back to the time around 1908 when he, along with Pandit Kanshi Ram founded the Indian Independence League in Portland, Oregon. His works also brought him close to other Indian nationalists in United States at the time, including Taraknath Das. In the years preceding the World War I, Khankhoje was one of the founding members of the Pacific coast Hindustan association, and subsequently founded the Ghadar Party. He was at the time one of the most influential members of the party. He met Lala Har Dayal in 1911. He also enrolled at one point in a West Coast military acadmy.
Through World War I, Khankhoje was intricately involved in the Hindu-German Conspiracy when he was involved in the plans for the mutiny. He had joined a western He visited Europe during the war and subsequently went to Mesopotamia along with other members of what was the Berlin Committee. In the summer of 1915, he worked clandestinely among roops of the Indian expeditionary force, spreading nationalist literature and hoping to incite a mutiny. Through the course of the war, Khankhoje made his way through Turkey and Persia under different muslim guises as far as Baluchistan, spreading Ghadarite propaganda en route. He is known to have attempted insurrections and raised at the Iran-Baluchistan border while Mahendra Pratap's Indo-German expedition attempted to rally the Afghan Emir Habibullah Khan against British India. Towards the end of the war, Khankhoje, like most of the members of the Berlin committee, began turing towards communism. He is known to have been in Soviet Union in company of the earliest Indian communist, including Virendranath Chattopadhyaya, M. P. T. Acharya, M. N. Roy, Abdur Rab Barq. He met Lenin at Moscow in 1921. For his nationalist work at the time, Khankoje was banned from returning to India as a highly dangerous individual.
Khankhoje later moved to Mexico in the 1920s, where he was instated the professor of Botany and Crop Breeding in the National School of Agriculture in Mexico. In 1936, Khankhoje married Jean Alexandrine Sindic, a Belgian women in Mexico by whom he had two daughters. He was led the Mexican corn breeding program and was appointed director to the Mexican Government's department of Agriculture. Both Pandurang and Jean returned to India after 1947. His application for visa was initially rejected by the Indian government due to the ban by the British Indian Government, but was eventually overturned. He settled in Nagpur and subsequently embarked on a political career. Pandurang Khankhoje died on January 22, 1967.