His parents were Nissei (second-generation Japanese-Americans), who ran a family farm in Morro Park. He was brought up with American and Japanese traditions. For instance, in music he studied viola, clarinet, and koto, in addition to being taught piano by his mother. He attended the University of California at Santa Cruz, graduating with highest honors. He took an advanced degree at San Francisco State University. At the same time he worked with the San Francisco Opera as assistant to conductor Laszlo Varga.

From 1977 to 1979 he was Associate Artistic Director of the Opera Company of Boston under Sarah Caldwell, while studying conducting and musicology with Osbourne McConathy. In 1979 he returned to the San Francisco Bay Area. There he was Assistant Conductor of the Oakland Symphony, Music Director of the Oakland Ballet Orchestra, and Music Director of the Berkeley Promenade, which afterward changed its name to the Berkeley Symphony Orchestra.

He gained his first international reputation in a distinctly unorthodox manner: The unorthodox rock composer Frank Zappa chose him to conduct his very difficult orchestral music in a project with the London Symphony Orchestra in 1983. The next year the eminent French composer Oliver Messiaen picked Nagano to assist Seiji Ozawa in preparing the 1984 world premiere of his opera Saint Francis of Assisi.

In 1984 Nagano made headlines by substituting on less than a day's notice and with no rehearsal with the Boston Symphony Orchestra in Mahler's Ninth Symphony. The standing ovations and acclaim led to receiving a Seaver Conducting Award, the largest cash conducting award, intended to "develop the talent and artistry of American conductors on the threshold of major international careers." He used the prize for studies with Ozawa, Boulez, and Bernstein.

In 1989 he was appointed Music Director of the Lyon Opera Orchestra. In 1990 he became Associate Principal Guest Conductor of the London Symphony Orchestra and won two Gramophone Awards for his recording of Prokofiev's Love of Three Oranges with the Lyon Opera. In 1991 he was named Principal Conductor of the Hallé Orchestra in Manchester, England.

His first recording with the Hallé was a Shostakovich & Prokofiev Violin Concerto with Vadim Repin. In 1995 he won his first Grammy for his Lyon Opera recording of Carlisle Floyd's Susannah, and a second Grammy for Prokofiev's Peter and the Wolf with Patrick Stewart as narrator.

He has guest conducted widely, including the Royal Concertgebouw Orchestra of Amsterdam, The Berlin Philharmonic, the Los Angeles Philharmonic, and the German Symphony Orchestra. His recordings stress 20th Century music, including Britten's The Rescue of Penelope, Adam's El Dorado, Slonimsky's Earbox, and Lolapolooza, and Poulenc's Dialogues des Carmelites. Throughout all this he retained his association with the Berkeley Symphony Orchestra.