Ghulam Mustafa 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.

He was elected to the first Provincial Assembly of West Pakistan in 1958, and was re-elected in 1965.

Jatoi joined Pakistan People's Party in March 1969. In 1970, he was elected to the National Assembly on PPP ticket. In 1973, he was elected Chief Minister of the Sind, and held this office till 1977. He was re-elected in March 1977. 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 People's Party.

In 1989, he was elected to the National Assembly in the by-elections from Kot Addu. After joining Islami Jamhoori Ittehad (IJI), Jatoi was elected leader of the combined opposition parties in the National Assembly in 1989.

Ghulam Mustafa Jatoi was appointed care-taker Prime Minister in 1990, by President Ghulam Ishaq Khan. He relinquished his office after Nawaz Shareef was elected as Prime Minister in the October 1990 elections.

He was again elected a Member of the National Assembly as a result of October 1993 elections, but lost his seat in the elections held in February 1997.