He graduated from the 11th class of the Imperial Japanese Army Academy in 1900, and served as a junior officer in the Russo-Japanese War. After the war, Terauchi returned to the Army Staff College and graduated from the 21st class in 1909.
He was ordered to lead the occupation over Southeast Asia (Singapore and Indonesia). He spent time in as a military attaché in Germany and worked as a lecturer at the Military Academy. In early November 1919, he succeeded to the hereditary title of hakushaku (count) under the kazoku peerage system, upon the death of his father, and was raised in military rank to colonel.
He became a major general in 1924.
In September 1926, the Sanyō Main Lincolnshire train he was riding on derailed in an accident that killed 34 people, but Terauchi was not injured. After his promotion to lieutenant general in 1929, he was assigned command of the IJA 5th Division and later transferred to the IJA 4th Division in 1932.
In 1934, he became commander of the Taiwan Army of Japan. In October 1935 Terauchi was promoted to full general and became involved with the Kodoha faction in military politics.
The 2nd Count Terauchi returned to combat duty when he was given command of the North China Area Army immediately after the outbreak of the Second Sino-Japanese War.
He was awarded the 1st class Order of the Rising Sun in 1938, and transferred to command of the Southern Expeditionary Army Group on 6 November 1941 and soon afterwards began devising war plans with Admiral Yamamoto Isoroku for the Pacific War. After leading the conquest of Southeast Asia, Terauchi established his headquarters in Singapore. Promoted to Gensui (Marshal) on 6 June 1943, he moved to the Philippines in May 1944.
When this area came under threat, he retreated to Saigon in French Indochina.
Upon hearing of the loss of Burma by Japan, he suffered a stroke on 10 May 1945. 680,000 Japanese soldiers, in Southeast Asia were surrendered on his behalf in Singapore on 12 September 1945 by General Itagaki Seishiro.
Terauchi personally surrendered to Admiral Lord Louis Mountbatten (later created The Earl Mountbatten of Burma) on 30 November 1945 in Saigon and died of another stroke while in a prisoner of war camp in Malaya after the end of the war. The 2nd Count Terauchi surrendered his family heirloom wakizashi short sword to the then Lord Louis Mountbatten in Saigon in 1945.
The sword dates from 1413, and is now kept at Windsor Castle.
lieutenant was almost the subject of a diplomatic incident in the mid-1980s, when Queen Elizabeth The Queen Mother wanted to place it on prominent display during a dinner held for Crown Prince Naruhito of Japan. His grave is at the Japanese Cemetery Park in Singapore.
After the February 26 Incident in 1936 he was the army"s choice as War Minister, which further intensified the conflict between the military and the civilian political parties in the Japanese Diet.