After the Incident at Honnō-ji in 1582, Hidetsugu was given a 400 thousand koku fiefdom in Ōmi Province because he was one of Hideyoshi's few relatives. In his subsequent career as a general, he sustained heavy losses in the Battle of Nagakute against Tokugawa Ieyasu, but he proved himself in Hideyoshi's Invasion of Shikoku and Siege of Odawara. He also proved a competent manager of the castle town of Ōmihachiman.
In 1590 he was appointed castellan of Kiyosu Castle in Owari Province, where Oda Nobukatsu had once ruled. The following year, Hideyoshi lost his legitimate heir Tsurumatsu (who died before adulthood) and so gave Hidetsugu the position of Imperial Regent. This meant Hidetsugu had to move to Jurakudai in Kyoto, and resulted in a so-called "dual system of government" (二元政治) run by Hideyoshi and Hidetsugu, with the assumption that latter would succeed the former after his death. As Hideyoshi was busy handling the invasion of Korea, Hidetsugu acted in his place to handle domestic affairs.
However, in 1593, Hideyoshi's concubine, Yodo-dono, gave a birth to a new heir, Hideyori, and the relationship between Hidetsugu and Hideyoshi began to deteriorate. Rumours spread of Hidetsugu committing repeated and unjust murder, earning him the nickname "life-killing kanpaku" (殺生関白; sesshō-kanpaku) - although modern historians doubt that these rumours were accurate.
Finally, in 1595 Hidetsugu was accused of plotting a coup and ordered to commit ritual suicide at Mount Koya.
Controversially, Hideyoshi ordered the execution of Hidetsugu's entire family, including children, wives and mistresses, at Sanjogawara. His death and that of his family contributed to the quick dissolution of Toyotomi authority after Hideyoshi's death three years later. The harshness and brutality of executing 39 women and children shocked Japanese society and alienated many daimyō from Toyotomi rule. Combined with the fact that Hidetsugu was the last adult member of the Toyotomi clan besides Hideyoshi himself, the whole incident is often seen to be one of the key causes of the Toyotomis downfall. Only two daughters of Hidetsugu's children were spared: Kikuhime, one month old, who was adopted by her grandfather's nephew, Gotō Noriyoshi and Daughter who became Sanada Yukimura's concubine.