Batlle y Ordóñez was the son of a president of Uruguay (1868–72), General Lorenzo Batlle, and a grandson of José Batlle y Carréo, a leading citizen of colonial Montevideo. He was educated at the University of Montevideo and at the Sorbonne. He began his political career on June 16, 1886, when he founded the newspaper El Día. Shortly thereafter he joined the Colorado Party, one of the two ruling political parties of Uruguay, and in 1890 he started work to transform his party into a nationwide democratic political organization. He was elected to the Uruguayan Chamber of Deputies in 1893 and to the Senate for Montevideo in 1896. He soon became president of the Senate and a member of his party's National Executive Commission. In 1900 he made an unsuccessful bid for the national presidency.

Batlle y Ordóñez was elected president in 1903, but by a narrow margin that produced tension with the opposition Blanco Party and led to a civil war in 1904. Batlle y Ordóñez and his followers emerged victorious in 1905, with the Colorado Party in undisputed control of the country. He held honest presidential and legislative elections in 1905, which he and his party won. At the end of his term in 1907, he freely stepped down from the presidency, though he played a role in choosing his party's presidential candidate.

After a triumphant tour of Europe, Batlle y Ordóñez was reelected president in 1911 and continued the reforms he had started earlier. During his two periods in office, Batlle y Ordóñez inaugurated labour reforms, limited the profits of foreign-owned businesses, encouraged migration, nationalized and developed public works, ended the death penalty, and protected illegitimate children.

At the end of his presidency, fearing the power of a one-man executive, Batlle y Ordóñez sought to reform the Uruguayan constitution by creating a collegiate executive. This effort aroused great opposition throughout the country and even divided his own political party. As a result, a new constitution promulgated in 1919 provided for a bifurcated executive—a president and national executive council—which was considered a defeat for Batlle y Ordóñez. Nevertheless, he agreed to serve as president of the council in 1920 and in 1926. His nephew Luis Batlle Berres (Batlle Berres, Luis) served as president from 1947 to 1951, and his grandnephew Jorge Batlle Ibáñez assumed the presidency in 2000.