His family was from Cang Prefecture (滄州, roughly modern Cangzhou, Hebei) and traced its ancestry to the late Han dynasty warlord Yuan Shao.
Yuan Shuji, along with Zhang Jianzhi, Cui Xuanwei, Huan Yanfan, and Jing Hui, were recognized as leaders in Emperor Zhongzong's restoration, and they were put into key positions and created dukes, with Yuan becoming continuing to serve as Fengge Shilang and carrying the greater chancellor designation of Tong Fengge Luantai Sanpin (同鳳閣鸞臺三品) and carrying the title of Duke of Nanyang.
In spring 706, Yuan was further sent out of the capital Chang'an to serve as the prefect of Yu Prefecture (豫州, roughly modern Zhumadian, Henan).
Later in spring 706, with all five of the coup leaders already out of the capital, Wu Sansi and Empress Wei made accusations against them, and they were demoted to more remote prefectures—in Yuan's case, to be the prefect of Ying Prefecture (郢州, roughly modern Wuhan, Hubei).
The five were further demoted with the provisions that they would never be allowed to return to the capital Chang'an, with Yuan becoming the military advisor to the prefect of Dou Prefecture (竇州, roughly modern Maoming, Guangdong).
Emperor Zhongzong, citing that the five had been previously awarded iron certificates that guaranteed that they would not be executed in recognition of their contribution, ordered that they be reduced to commoner rank and permanently exiled to the Lingnan region with their families—in Yuan's case, to Huan Prefecture (環州, roughly modern Hechi, Guangxi).