Tsakalotos was born in Preveza, Epirus, in 1897. At age 13 he left for Alexandria, Egypt, joining his elder brother. He returned to Greece and, in 1916, graduated Military School and was commissioned a junior officer.
At the outbreak of World War II, he was a colonel. He saw action in Epirus and Albania and, after Greek capitulation in April 1941 joined a resistance group. He managed to leave Greece in 1943 and join the Greek Armed forces in Egypt and eventually (September 1944) took part in the Battle of Rimini.
On returning to Greece later in 1944, Tsakalotos joined the conservatives and monarchists who fought the communists of the EAM/ELAS resistance movements for control of Athens. Eventually the situation was temporarily settled by the Varkiza Agreement in 1945 only to break out in full civil war (1946-1949). Tsakalotos, by now a Major General, was given command in the front lines of operation. In August 1949 he led the national forces to victory in the decisive Battle of Grammos-Vitsi which, for all practical purposes, ended the Greek Civil War.
Tsakalotos retired as a Lt General on November 20, 1952. He became Ambassador to Yugoslavia during Constantine Karamanlis' term in office as PM but, other than that pretty much stayed out of the public limelight.
On March 23, 1984, Tsakalotos once again made history by shaking hands with Markos Vafiadis, the former commander of the Communist forces he had fought during the Greek Civil War. The event was captured by TV cameras and made headlines: another step in the reconciliation of former enemies of that dark period of Greek history.