Between 1913 and 1924 he held several high-ranking positions within a succession of Mongolian governments including; the Bogd Khaanate (1911–1924), the Chinese occupation (1919-1921), and the puppet regime under Roman Ungern von Sternberg (1921).

Tserendorj was born in 1868 as a subject to the Great Shabi (the estate of the personal retainers of the Jebtsundamba Khutuktu) in Kherlen Bayan Ulaan in present-day Khentii Province.

[5] From 1914 to 1915, Tserendorj accompanied Prime Minister Tögs-Ochiryn Namnansüren as part of the Mongolian delegation to the 8-month long Kyakhta treaty conference between Czarist Russia and the Republic of China that sought to clarify, among other things, the Russian-Chinese border in East Asia and Mongolia's geopolitical status.

Tserendorj maintained his position as Minister of Foreign Affairs after the occupation of Niislel Khüree (present day Ulaanbaatar) by troops under the Chinese warlord Xu Shuzheng in late 1919.

[7] Xu installed a dictatorial regime, imprisoned leaders of Mongolia's independence movement such as Khatanbaatar Magsarjav and Manlaibaatar Damdinsüren, and placed the Bogd Khan under house arrest.

[14] News articles from 1921 show Tserendorj "photographed in Moscow while signing a pact with the Russian Soviet Government opening diplomatic relations between the new revolutionary republic of Mongolia and Russia, Tsiben Dargi headed the Mongolian delegation.

"[17] Later, Samuel Sokobin, the U.S. Consul to Kalgan who traveled to Mongolia in 1924, reported that Tserendorj was "highly intelligent, head and shoulders above his colleagues in common sense and a man who exercised a restraining influence on other members of the government".

He was appointed prime minister upon the death of Sodnomyn Damdinbazar on September 18, 1923 and was elected to the Presidium (or Politburo) of the Mongolian People's Revolutionary Party (MPRP) Central Committee.

Later, Tserendorj and his allies came under heavy criticism from pro-Soviet members of the MPRP who felt such efforts were counterrevolutionary and a betrayal of the special relationship that had developed between Mongolia and its chief benefactor.

Tserendorj rejected such criticism while also resisting what he saw as heavy-handed Soviet pressure to rapidly abolish private property in Mongolia, implement cooperatives and state industries, and persecute the Buddhist Church.

He also became increasing uncomfortable with Comintern efforts to "divide and control" the MPRP by supporting the radicalized Mongolian Revolutionary Youth League and promoting younger, more hard-line party members, particularly from rural areas, to challenge the authority of the "old guard" leadership whom the Soviets suspected were overly conservative.