Rustam Khan was the younger brother of a prominent Azerbaijani politician Fatali Khan Khoyski. From the royal Khoyski family originating from Khoy later settled in Shaki, Rustam Khan Khoyski was born to the family of Azerbaijani general Isgandar Khan Khoyski in Ganja, Azerbaijan on November 5, 1988. After completing Ganja Gimnasium, he graduated from the Law Department of Saint St. Petersburg State University in 1913.
He then worked as a judge assistant in Ganja and Baku.
Rustam Khan is recognized as one of the activists of the Azerbaijani Independence Movement. After establishment of Azerbaijan Democratic Republic on May 28, 1918 he worked as the Director of State Issues Department of Council of Ministers of Alternative Dispute Resolution. After Bolshevik take over of Azerbaijan, Khoyski remained in the country and served as Chairman of the Azerbaijan Soviet Socialist Republic Economic Council Board.
In the following years, he also worked as a corporate lawyer in Baku and Moscow. He died in Moscow in 1948.
Rustam Khan Khoyski was buried at the Novodevichy Cemetery.