He is a former Death Eater. He was captured by Auror Alastor Moody after the fall of Lord Voldemort; the Ministry of Magic released him from Azkaban in exchange for the names of other Death Eaters.
Karkaroff went on to become Head Teacher at Durmstrang Institute, a school of magic believed to be located in Scandanavia. However, he made drastic reforms to the Defence Against the Dark Arts department, adding actual Dark Arts to the syllabus on top of defence. Durmstrang students are often from families known to have Dark Arts connections.
Karkaroff is said to have shown exceptional favouritism towards Bulgarian student Viktor Krum, champion of the 1994 Quidditch World Cup.
In 1994 Durmstrang entered the newly-revived Triwizard Tournament with Hogwarts School of Witchcraft and Wizardry and Beauxbatons Academy of Magic; as headmaster, Karkaroff was a Triwizard judge. It is believed that he threatened to drop out of the Tournament after a complication over champions.
However, during the course of the year he met fellow ex-Death Eater Severus Snape, with whom he shared several conversations regarding past events.
In June 1995, at the end of the Triwizard Tournament, Karkaroff went into hiding after sensing the summons of the Dark Lord Voldemort. He has not been seen since that time.
Igor Karkaroff's nationality is uncertain. Though he speaks without a foreign accent, his name would not suggest that he is of English descent.