As a young man, Alfaro participated in two failed revolts against the reactionary, pro-clerical regime of Gabriel García Moreno (1865 and 1871). When the latter revolt failed, he went into exile in Panama, where he became a leading advocate of liberalization in South America. He returned to Ecuador in 1893 at the head of a revolt against Luis Cordero's regime. This time, the revolt was a success; after two years of fighting, Alfaro was installed as president in 1895.
Over the next two years, Alfaro laid the basis for a democratic regime in the country. His most important achievement was the drafting of a new constitution and the holding of elections in 1897, in which he was elected for a four-year term.
Though his successor, fellow Radical Liberal Party leaderLeónidas Plaza Gutiérrez, upheld his liberal reforms, Alfaro was disillusioned with him and did not support him in the 1901 elections. He was even more bitterly opposed to Plaza's successor, Lizardo García, and led a successful revolt against him. On January 15, 1906, García was toppled and Alfaro again became president. His rule was confirmed in elections held a year later, in January 1907.
Alfaro's second term in office saw trhe institution of even more liberal reforms, most notably the official separation of Church and State, implemented as an attempt to curb the influence of the conservative Catholic clergy. Other important reforms made education and health care more accessible to the general public.
In 1911, Alfaro retired from office and moved to Europe. He returned to Ecuador in 1912, following the sudden death of his successor, Emilio Estrada, hoping that he would be able to return to power. This attempt failed from the outset, and Alfaro and his supporters were arrested in Guayaquil, shortly after he arrived in the country. On January 28, 1912, an angry mob stormed the prison where he was being held and lynched him. It is claimed that Leónidas Plaza Gutiérrez, his rival for leadership of the Radical Liberal Party, was behind the murder.
Alfaro's legacy was the inspiration for a small Ecuadorian terrorist group called "Alfaro Lives, Dammit," which was disbanded in 1988.