After law studies in Paris, like many Phanariotes he pursued a career in the civil service of the Ottoman Empire.

In 1874 he was appointed ambassador to Rome, and in 1878 he took part in the preliminary negotiations with Russia over the Treaty of San Stefano.

There he was successful in changing the San Stefano peace terms in favour of the Ottoman Empire (Treaty of Berlin).

Karatheodori finished his career as the Porte-appointed Prince of the autonomous Greek island of Samos for a full decade (1885-1895).

In May 1895 he was again appointed Governor of Crete amidst renewed inter-communal tension, but was unsuccessful in restoring order and resigned in December.