Kawajiri was born on November 18, 1950 and grew up in Yokohama, Kanagawa Prefecture, Japan. After he graduated from high school in 1968 he worked as an animator at Mushi Production Animation until it closed in 1972. He then joined Madhouse Studio and in the 1970s was promoted to animation director. He finally debuted as a film director with 1984's Lensman, directing jointly with the more experienced Kazuyuki Hirokawa (Kawajiri also did the character design along with Kazuo Tomizawa). Gaining an interest in darker animation, he next directed The Running Man. Afterwards, he was instructed to make a 35 minute short based on Hideyuki Kikuchi's novels, which was released as Wicked City. After completing it, however, his producers were so impressed that he was asked to make it a feature length film. Kawajiri enjoyed the dark tone, and agreed to manage and complete the film within a year.
Wicked City received critical and commercial success when released in 1987, giving Kawajiri more creative freedom. He began scripting and designing his own film set in feudal Japan. The result, Ninja Scroll, about the Japanese folk hero Jubei Yagyu, was soon released. After the Western release in 1996, Kawajiri's status as a director received international recognition. He was asked in 2002 to direct a segment, titled Program, of The Animatrix, considered a showcase of the best directors of Japanese animation. Before The Animatrix, he also directed Vampire Hunter D: Bloodlust, which was based on a novel by Hideyuki Kikuchi.
Kawajiri directed Highlander: The Search for Vengeance. It was released on DVD on 5 June 2007. According to an interview with Ain't It Cool News with producer Galen Walker, Kawajiri disliked the fact that 7–8 minutes of added scenes with no opening exposition text sequence were removed when the film was released, but the director's cut will include the footage. Kawajiri has script approval for a sequel to Ninja Scroll, which was listed as being in pre-production with no specific release date as of 2010.