He started working in the British Income Tax Office of Nicosia in 1954. One year later (June 1955), as part of the EOKA campaign to drive out the British and unite the island with Greece, Karaolis blew up his place of employment. Unwilling to kill any co-workers, he set the timer on his bomb to go off on a Sunday.
On August 28, 1955, Karaolis, along with two EOKA companions (Andreas Panayiotou and Yiannis Ioannou) executed a Greek-Cypriot Special Branch police constable named Herodotus Poullis in Ledra Street, Lefkosia. All three men got away in the confusion that followed but Karaolis had to leave his bicycle behind. From Department of Transportation records the British were able to trace its ownership and Karaolis became a wanted man. According to Grivas' standard practice, he had to join the guerrila fighters on the mountains. A close associate of Grivas and money-donor to the cause, Yiannakis Drousiotis, wrote a letter of introduction to Grigoris Afxentiou to accept him on his team. A few days later, Karaolis, with this letter in his pocket, was stopped and arrested by Turkish-Cypriot policemen who handed him to the British.
Karaolis was tried and convicted of PC Poullis' murder and was executed by hanging on May 10, 1956, along with Andreas Dimitriou. He was buried in the Imprisoned Tombs in the Central Jail of Lefkosia. His death sparked anti-British riots in Greece where 4 persons died and 200 were injured.