Kan married his wife Nobuko in 1970. Nobuko, born in Okayama Prefecture, entered a relationship with the Tokyo-dwelling Kan after entering Tsuda College. As the two are first cousins, the engagement was met with parental opposition. They have two sons, Gentarō and Shinjirō. Gentarō is a civil rights Activist and lost in elections for the Lower House in 2003 and 2005. Shinjiro is a Veterinarian and works at an animal hospital in Nerima, Tokyo.

Kan is nicknamed "Ira-Kan" (Fretful Kan") due to his reputed short temper. His hobbies are go, shogi and origami. Kan built a machine to calculate the complicated mahjong point system and applied for a patent in 1973.

After having lost in the 1976 and 1979 general elections and 1977 Upper House election, Kan achieved a seat in the lower house in 1980 as a member of the Socialist Democratic Federation. He gained national popularity in 1996, when serving as the Minister of Health and Welfare, admitting the government's responsibility for the spread of HIV-tainted blood in the 1980s and directly apologized to victims. At that time, he was a member of a small party forming the ruling coalition with the Liberal Democratic Party (LDP). His frank action was completely unprecedented and was applauded by the media and the public.

Subsequently, on 4 June, Kan was designated prime minister by the Diet. On 8 June, Emperor Akihito formally appointed Kan as the country's 94th prime minister, and the 29th postwar prime minister. His cabinet was formed later on the day.

In 1998, his image was affected by allegations of an affair, vigorously denied by both parties, with a television newscaster and media consultant, Yūko Tonomoto. After Yukio Hatoyama resigned as the leader of the Democratic Party of Japan (DPJ), Kan again took over the position. In July 2003, the DPJ and the Liberal Party led by Ichirō Ozawa agreed to form a united opposition party to prepare for the general election that was anticipated to take place in the fall.

During the campaign of the election of 2003, the DPJ called the election as the choice of the government between the ruling LDP-bloc and the DPJ, with Kan being presented as the alternative candidate to then Prime Minister Junichiro Koizumi. His face was used as the trademark of the campaign against the LDP.

The Kan government intervened in mid-September to weaken the surging yen by buying U.S. dollars, a move which temporarily relieved Japan's exporters. The move proved popular with stock brokers, Japanese exporters, and the Japanese public. It was the first such move by a Japanese government since 2004. Later, in October, after the yen had offset the intervention and had reached a 15-year high, the Kan cabinet approved a stimulus package worth about 5.1 trillion yen ($62 billion) in order to weaken the yen and fight deflation.

In mid-October 2005, Kan, who turned 60 in 2006, proposed the creation of a new political party to be called the "Dankai (baby boomer) Party". The initial intent of the party was to offer places of activity for the Japanese baby boomers – 2.7 million of whom began to retire en masse in 2007.

On 2 June 2010, Yukio Hatoyama announced his intention to resign as the leader of the Democratic Party of Japan (DPJ) and as prime minister, also saying that he had urged his backer in the party, Ichirō Ozawa, to resign as Secretary General. The Cabinet resigned en masse on 4 June. Foreign Minister Katsuya Okada and Land and Transport Minister Seiji Maehara, though once considered to be possible successors to Hatoyama, announced their support for Naoto Kan. Kan, at his age of 63, won the leadership of the DPJ with 291 votes to 129, defeating a relatively unknown Ozawa-backed legislator Shinji Tarutoko, 50, who was leading the environmental policy committee in the lower house of the Diet.

Kan announced his intention to resign on 10 August 2011. On 26 August, with passage of a debt bill and the renewable Energy bill as final conditions, Kan expected "to see his successor in office [within the] week, according to a Kyodo news report, which cited cabinet ministers". At the same time, Seiji Maehara, who had supported Kan in 2010, was reported to have announced his intention to run to succeed Kan. Maehara is seen as the potential DPJ candidate most popular with the voters at the time. Several other cabinet members joined the race, and the election of the DPJ successor was scheduled for 29 August. At that time, Yoshihiko Noda, most recently Finance minister, was elected as the new DPJ leader and, as leader of the largest party in the Diet, became prime minister as well.

In the 2012 general election called by Kan's successor Noda, Kan lost his seat in the Tokyo 18th district, but retained a seat in the diet through the proportional representation system. In the 2014 general election, Kan lost his district seat but was again elected through the proportional block. He joined the Constitutional Democratic Party of Japan along with the liberal-leaning members of the Democratic Party following the party split prior to the 2017 general election. In the election, he regained his district seat, defeating the LDP incumbent Masatada Tsuchiya with a margin of 1,046 votes.

In August, Kan apologised to the Republic of Korea on the 100th anniversary of the Japan–Korea Annexation Treaty.