He is regarded as the "father of the Japanese short story", and Japan's premier literary award, the Akutagawa Prize, is named after him.

He entered the First High School in 1910 and developed relationships with classmates such as Kan Kikuchi, Kume Masao, Yūzō Yamamoto, and Tsuchiya Bunmei [ja], all of whom would later become authors.

Following graduation, Akutagawa taught briefly at the Naval Engineering School in Yokosuka, Kanagawa as an English language instructor, before deciding to devote his efforts to writing fulltime.

In 1914, Akutagawa and his former high school friends revived the literary journal Shinshichō ("New Currents of Thought"), where they published translations of William Butler Yeats and Anatole France along with works they had written themselves.

Akutagawa published his second short story "Rashōmon" the following year in the literary magazine Teikoku Bungaku ("Imperial Literature"), while still a student.

[2] In early 1916 he published "Hana" ("The Nose", 1916), which received a letter of praise from Sōseki and secured Akutagawa his first taste of fame.

Examples of these stories include: Gesaku zanmai ("Absorbed in Letters", 1917)[7] and Kareno-shō ("Gleanings from a Withered Field", 1918), Jigoku hen ("Hell Screen", 1918); Hōkyōnin no shi ("The Death of a Christian", 1918), and Butōkai ("The Ball", 1920).

During the trip, Akutagawa visited numerous cities of southeastern China including Nanjing, Shanghai, Hangzhou and Suzhou.

His aunt Fuki played the most prominent role in his upbringing, controlling much of Akutagawa's life as well as demanding much of his attention, especially as she grew older.

Akutagawa's final works include Kappa (1927), a satire based on the eponymous creature from Japanese folklore, Haguruma ("Spinning Gears" or "Cogwheels", 1927), Aru ahō no isshō ("A Fool's Life" or "The Life of a Stupid Man"), and Bungeiteki na, amari ni bungeiteki na ("Literary, All Too Literary", 1927).

Towards the end of his life, Akutagawa suffered from visual hallucinations and anxiety over the fear that he had inherited his mother's mental disorder.

The central conceit of the story (i.e. conflicting accounts of the same events from different points of view, with none "definitive") has entered into storytelling as an accepted trope.