Jatoi was educated at Karachi Grammar School and passed his senior Cambridge. In 1952, he went to England for his bar at law, but had to return home within one year due to his father's serious illness.
Jatoi joined Pakistan People's Party in March 1969. In 1970, he was elected to the National Assembly on PPP ticket. He held the Portfolios of Political Affairs, Ports and Shipping, Communications, Natural Resources, Railways & Telecommunications in the Federal Government headed by Prime Minister Zulfiqar Ali Bhutto. In 1973, he was elected Chief Minister of Sindh, and held this office till 1977. He has the distinction of being the longest serving Chief Minister of Sindh since the birth of Pakistan. After the imposition of Martial Law, Jatoi remained associated with the Movement for Restoration of Democracy (MRD). Twice he was arrested in 1983 and 1985.
Later, he founded the National Peoples Party. A number of political heavyweights from all over the country were brought into the National People’s Party, launched under the chairmanship of Ghulam Mustafa Jatoi. Among them were Ghulam Mustafa Khar, Haneef Ramay, SM Zafar, Hamid Raza Gilani, Malik Hamid Sarfraz, Ghaus Bux Raeesani, Kamal Azfar, Mian Sajid Pervaiz, Nafees Siddiqui, Rana Muhammad Haneef, Akhtar Hussain Shah, Rabbani Khar and Aftab Shah Gilani. An attractive manifesto was prepared and the party was expected to shoot into prominence in no time due to the declining popularity of the Peoples Party at the time.
The NPP and the PML, then headed by Muhammad Khan Junejo, along with 7 other political parties, contested the 1988 elections from the platform of the Islami Jamhoori Ittehad. The PPP won the bout, though with a thin majority.
Mr. Jatoi was appointed Prime Minister after the dismissal of the Benazir government on corruption and incompetence charges by President Ghulam Ishaq Khan. In protest at the autocratic tendencies of the Nawaz Sharif, the then Prime Minister, Mr. Jatoi joined hands with the opposition lead by Benazir Bhutto in launching a movement against the Sharif government, resulting in its dismissal in 1993.
The NPP contested the 1993 elections and later joined the Benazir Bhutto government as a coalition partner till the Governments dismissal in 1996 by the PPP President Farooq Leghari. In the 2002 general election, it was the dominant partner in a new group called the National Alliance which was Chaired by him. The National Alliance won 16 seats in the national Assembly, 16 seats in the Sindh Assembly and 3 Senate Seats.
In the 2008 election his son Ghulam Murtaza Khan Jatoi won election in NA-211 Naushahro Feroze-I under the banner of the National Peoples Party, defeating the runner-up PPP candidate, holding the seat won in 2002 by Dr. Abdul Ghaffar Khan Jatoi under the National Alliance banner. His Other Son, Arif Mustafa Jatoi (Former Food and Agriculture Minister) won PS-19 and another Son, Masroor Jatoi won PS-23, Both being Provincial Assembly Seats. This has set a probable record wherein 4 sons are simultaneously present in all 3 Legislative forums, i.e. Provincial Assembly, National Assembly and Senate. Another NPP candidate also won PS-12 Shikarpur, Abid Hussain Jatoi, holding the seat he won in 2002.