During the politico-religious agitation which preceded the establishment of the Bulgarian exarchate in 1870, a number of Bulgarian youths were sent to Russia to be educated at the expense of the Imperial government; among them was Stambolov, who was entered at the seminary of Odessa in order to prepare for the priesthood. His wayward and independent nature, however, rebelled against the discipline of school life; he was expelled from the seminary on the ground of his association with Nihilists, and, making his way to Rumania, he entered into close relations with the Bulgarian revolutionary committees at Bucharest, Giurgevo and Galatz. In 1875, though only twenty years of age, he led an insurrectionary movement at Nova Zagora in Bulgaria, and in the following year organized another rising at Orekhovitza. In the autumn of 1876 he took part as a volunteer in the Servian campaign against Turkey, and subsequently joined the Bulgarian irregular contingent with the Russian army in the war of 1877-78.

After the signature of the Berlin Treaty in 1878 Stambolov settled at Trnovo, where he set up as a lawyer, and was soon elected deputy for his native town in the Sobranye. His force of character, his undoubted patriotism, his brilliant eloquence, and his disinclination to accept office - a rare characteristic in a Bulgarian politician - combined to render him one of the most influential men in Bulgaria. The overthrow of the Zankoff ministry in 1884 was largely due to his influence, and in that year he was nominated to the presidency of the Sobranye. He held this important office for the next two years, a critical period in the national history. The revolution of Philippopolis, which brought about the union of Bulgaria with eastern Rumelia, took place on the 18th of September 1885, and it was largely owing to Stambolov's advice that Prince Alexander decided to identify himself with the movement.

The war with Servia followed, and Stambolov, notwithstanding his official position, served as an ordinary soldier in the Bulgarian army. After the abduction of Prince Alexander by a band of military conspirators (Aug. 21, 1886) Stambolov, who was then at Trnovo, acted with characteristic promptitude and courage. In his capacity as president of the Sobranye he established a loyal government at Trnovo, issued a manifesto to the nation, nominated his brother-in-law, General Mutkurov, commander-inchief of the army, and invited the prince to return to Bulgaria.

The consequence of these measures was the downfall of the provisional government set up by the Russophil party at Sofia. On the abdication of Prince Alexander (Sept. 8) Stambolov became head of a council of regency, with Mutkurov and Karavelov as his colleagues; the latter, however, soon made way for Jivkov, a friend and fellow townsman of the first regent. Invested with supreme power at this perilous juncture, Stambolov displayed all the qualities of an able diplomatist and an energetic ruler. He succeeded in frustrating the mission of General Kaulbars, whom the Tsar despatched as special commissioner to Bulgaria; in suppressing a rising organized by Nabokov, a Russian officer, at Burgas; in quelling military revolts at Silistra and Rustchuk; in holding elections for the Grand Sobranye, despite the interdict of Russia, and in securing eventually the election of Prince Ferdinand of Coburg to the vacant throne (July 7, 1887). Under the newly-elected ruler he became prime minister and minister of the interior, and continued in office for nearly seven years (see Bulgaria). The aim of his foreign policy was to obtain the recognition of Prince Ferdinand, and to win the support of the Triple Alliance and Great Britain against Russian interference in Bulgaria.

In his dealings with Turkey, the suzerain power, he displayed considerable acuteness; he gained the confidence of the Sultan, whom he flattered and occasionally menaced; and aided by the ambassadors of the friendly powers, he succeeded in obtaining on two occasions important concessions for the Bulgarian episcopate in Macedonia (see Macedonia), while securing the tacit sanction of the Porte for the technically illegal situation in the principality. With the assistance of Austria-Hungary and Great Britain he negotiated large foreign loans which enabled him to develop the military strength of Bulgaria. Under Prince Ferdinand he pursued the same despotic methods of government which had characterized his administration during the regency; Major Panitza, who had organized a revolutionary conspiracy, was tried by court-martial and shot at Sofia in 1890; four of his political opponents were hanged at Sofia in the following year, and Karavelov was sentenced to five years' imprisonment. His tyrannical disposition was increased by the assassination of his colleague, Beltchev, in 1891, and of Dr Vlkovitch, the Bulgarian representative at Constantinople, in 1892, and eventually proved intolerable to Prince Ferdinand, who compelled him to resign in May 1894.

He was now exposed to the vengeance of his enemies, and subjected to various indignities and persecutions; he was refused permission to leave the country, and his property was confiscated. On the 15th of July 1895 he was attacked and barbarously mutilated by a band of Macedonian assassins in the streets of Sofia, and succumbed to his injuries three days later. His funeral, which was attended by the representatives of the powers at Sofia, was interrupted by disgraceful riots, and an effort was made to perpetrate an outrage on his remains. No attempt was made to arrest his murderers; two persons were, however, arraigned for the crime in 1896, and subjected to almost nominal penalties.