From 1901 to 1905 he studied social science, law and philosophy at the Friedrich Wilhelm University of Berlin and in Heidelberg.

He fought for agrarian reform in Thessaly seeking to break up the big farms that existed there since the rule of the Ottoman Empire and redistribute them to the local farmers.

In 1916, he joined the Provisional Government of National Defence of Eleftherios Venizelos in Thessaloniki which sought to bring Greece at the side of the Allies of World War I.

When Venizelos lost the 1920 elections, he remained in Greece and criticised the People's Party governments under the successive Prime Ministers Dimitrios Rallis, Nikolaos Kalogeropoulos, Dimitrios Gounaris, Nikolaos Stratos and Petros Protopapadakis for their mishandling of the ongoing Greco-Turkish War of 1919–1922.

In 1921, along with others, he published a document entitled the Republican/Democratic Manifesto (Δημοκρατικό Μανιφέστο), which criticised the monarchy, warning for future destruction in the Asian Minor front and finally calling Constantine I to resign, so Greece to survive.

In his programmatic statements on 24 March, Papanastasiou, after stressed that the National Assembly had constitutional rights and jurisdiction to declare the Republic, he submitted a draft resolution declaring the fall of the dynasty and the proclamation of the Republic, which, however, had to but would later be approved by referendum.