Born in Hyogo Prefecture, Katayama entered Grand Prix motorcycle racing in 1964 riding for Suzuki. He proved particularly effective in the smaller displacement categories, and his finest season came in 1967 when he won two Grand Prix races, including the French Grand Prix held at the demanding Circuit de Charade in the Auvergne mountains. That year he finished as runner-up in the 50cc World Championship, falling just short of teammate Hans-Georg Anscheidt who claimed the title. Katayama also finished fourth in the 125cc championship that same season, demonstrating competitive speed across multiple classes. Over the course of his Grand Prix motorcycle career he accumulated four race victories.
After retiring from motorcycle racing, Katayama transitioned to four-wheeled competition, becoming a factory driver for Mazda, a role he would hold until his retirement from racing at the end of the 1990 season. He became closely associated with the rotary-engined machinery that defined Mazda's motorsport identity, competing in domestic Japanese series as well as international endurance events.
One of his most memorable international outings came at the Bathurst 1000 in Australia. In 1977 he made a dramatic and costly appearance, rolling his Mazda RX-3 at Murray's Corner on lap 103, an incident that became well-known among Bathurst followers. He returned in 1982 and finished sixth overall, again paired with four-time Bathurst winner Allan Moffat in a factory-supported Mazda RX-7. The following year, 1983, the partnership delivered a stronger result as Katayama and Moffat finished second overall in the James Hardie 1000, a career-best result at the Mount Panorama Circuit.
Katayama was a frequent competitor in endurance racing, and his appearances at the 24 Hours of Le Mans and the 24 Hours of Daytona formed a significant chapter of his career. At Daytona he recorded class victories on two occasions: first in 1979 when he helped score a GTU class win during the Mazda RX-7's debut race at the circuit, finishing fifth overall, and again in 1982 when the team claimed GTO class honours with a fourth place overall finish.
At Le Mans, competing as part of Mazda's endurance program, Katayama placed twentieth overall and claimed victory in the GTP class during the 1990 24 Hours of Le Mans, the same event in which a Mazda 787B would go on to achieve full outright victory the following year. His 1990 GTP class win stood as a representative achievement from a long association with Mazda's rotary-powered efforts at the Circuit de la Sarthe.
Katayama's career illustrated the path that several Japanese drivers of his generation followed, moving from the tight discipline of small-displacement Grand Prix motorcycle racing into factory-backed automotive programs where consistent professionalism was valued over outright speed. His long association with Mazda helped establish the credibility of the brand's motorsport ambitions in both domestic and international competition. He died on March 26, 2016, following a short illness.