He was born in Addi Nebreid in western Tigray, and although he completed high school in Adwa, he failed the national college entrance examination. After the Ethiopian revolution broke out, he joined the TPLF. As a commander of EPRDF forces, General Hayelom led his forces to northern Shewa and later marched to Addis Ababa coming out victorious in 1991. One of his most daring acts was the "Agazi action", which happened on the early evening of 5 February 1985: he led a squad of TPLF fighters in attacking the main prison in Mek'ele, and freed over a thousand prisoners, killed 16 prison guards and wounded 9 soldiers without losing a single man. He later become one of the military leaders in the defence force of the Transitional Government of Ethiopia.
General Hayelom was shot down in Addis Ababa at a restaurant bar 14 February 1996; the motives for his death remain unexplained. In May 2008, the Late General Hayelom Araya Monument was unveiled at his birthplace, Shire, in the Tigray Region.