Cao was born in a poor family in Tianjin. During the First Sino-Japanese War in 1894, he went with the army to fight in Choson. After the war was over, he joined Yuan Shikai to participate in the training of New Army (Known as the Beiyang Army). Admired by Yuan, Cao managed to rise very quickly.
Cao Kun infamously acquired the presidential office by openly bribing assembly members with 5000 silver dollars each. This episode brought disrepute to the Beiyang government and its assembly, which lacked a quorum to even hold elections. It turned all the rival factions against him and his own clique began suffering from dissension. Relations with his chief protege, Wu Peifu, soured and there was rumours of an impending split within the Zhili clique but they stayed together to fight against the Fengtian clique.
One of his first acts as president was to promulgate the 1923 constitution of China. Hastily drafted by the guilt-ridden assembly, it was deemed the most democratic and progressive yet, but like previous charters it was ignored completely.
During a war against Zhang Zuolin in October 1924, Cao was betrayed and imprisoned by his General Feng Yuxiang in the Beijing coup. Feng occupied Beijing and forced Cao to resign. His brother, Cao Rui, committed suicide while under house arrest. He was released two years later as a goodwill gesture by Feng to Wu Peifu.