The career of Bagoas is summarized by the Greek historian Diodorus of Sicily in section 17.5 of his World history According to this Greek author, Bagoas was chiliarch of king Artaxerxes III Ochus, a title that can best be translated with "vizier". He was, in other words, responsible for the government of the empire.
Bagoas had reached this position not in the least place because he was a eunuch and did not belong to one of the noble families. It was a well known fact that members of the Persian aristocracy who had obtained influence at court, would use this influence to promote the career of their relatives, something that the kings did not like: too powerful families could become competitors for power. Hence, they trusted eunuchs more than Persian noblemen - who, in turn, hated the eunuchs.
But the king could trust them, and this explains why Bagoas rose to power. It is possible that he is identical to the 'Bagoses' who is mentioned in Jewish sources as one of the Persian commanders who restored order in Judah during the reign of Artaxerxes III Ochus. We have more certainty about Bagoas' role in Artaxerxes' successful campaign against pharaoh Nectanebo II of Egypt. He had been rewarded with the supreme command in the eastern satrapies, as some kind of "super-satrap". Finally, he had become chiliarch, "a eunuch in physical fact but a militant rogue in disposition", in Diodorus' words.
According to to the same author, king Artaxerxes "oppressed his subjects cruelly and harshly". This is the only reason that is ever given in our sources for the deed that made Bagoas famous (or notorious): the poisoning of the entire royal family. It must be noted, however, that there is a cuneiform tablet in the British Museum (BM 71537) that states that king Artaxerxes died of natural causes. Another fact that contradicts Diodorus is that several people who would, if he were right, have been killed, are known to have been alive during the reign of Alexander the Great (e.g., Parysatis).
The new king was a young man named Arses, who adopted the name Artaxerxes IV. He may have been Bagoas' puppet and may have been forced to reward the eunuch who had seen to his accession. Perhaps the reward consisted of an estate in Babylon, famous for its gardens, and a palace in Susa; they are mentioned as Bagoas' property.
Almost immediately after the accession of the new king, things went wrong. There were greater upheavals than he could control. At least two satrapies revolted: Egypt -which had reason to hate its conqueror anyhow- and Babylonia (although the evidence for the insurrection of Nidin-Bêl is meager). To add to these troubles, the king of Macedonia, Philip, prepared an attack on Persia's possessions in what is now Turkey: his trusted general Parmenion crossed the Hellespont in the spring of 336.
Under these circumstances, it comes as no surprise that the Persian nobility was divided. To them, it was intolerable that they were to be ruled by a eunuch -whom they despised anyhow- and a boy king. Prince Artašata, a distant relative of Artaxerxes, seems to exercised pressure. He was a powerful man and a formidable warrior, and he received support from several noblemen (e.g., Pharnabazus). It would seem from Diodorus that Artaxerxes now wanted to remove Bagoas; this forced Bagoas to kill the puppet king (summer of 336). Artašata now became king under the name of Darius III Codomannus. One of his first acts was the execution of Bagoas.
Thus ended the career of one of the most mysterious figures in ancient history. Bagoas killed Artaxerxes III and Artaxerxes IV and carries the responsibility for the crisis in Persia, which was used by the Macedonian king Philip and his successor Alexander the Great to overthrow the Achaemenid empire. The mystery is that we simply do not know what made him kill his benefactors.
Our (Greek) sources are unequivocally hostile to the man, a hostility that ultimately goes back to the hatred that eunuchs incurred at the Persian court. Bagoas became a moral example, as we can see in the concluding remarks of Diodorus.
As to Bagoas, an odd thing happened to him and one to point a moral. Pursuing his habitual savagery he attempted to remove Darius by poison. The plan leaked out, however, and the king, calling upon Bagoas, as it were, to drink to him a toast and handing him his own cup compelled him to take his own medicine.
The modern historian has not enough sources to reach a more objective judgment.