From 1975 until 1981, Khugayev studied at the psychology department of the Lomonosov Moscow State University. In 1981, he was elected party secretary in Kvaisa. After a promotion in 1987, he became a member of the very first session of South Ossetia's parliament. He was also actively involved in the 1991–1992 South Ossetia War, where he commanded a unit. After the war, he first became deputy Prime Minister under PM Oleg Teziev and Head of State Torez Kulumbegov, and then Prime Minister.