elder son of Prince Aly Khan by his first wife, Joan Yarde-Buller, the daughter of the 3rd Baron Churston. Educated in Switzerland and at Harvard University, he was chosen as successor to the imamate of the Nizārī Ismāʿīlī sect by his grandfather, the Aga Khan III, whom he succeeded in 1957.

The new Aga Khan initiated visits to his scattered Ismāʿīlī peoples in the first year of his reign. He became a strong leader, ordering his followers to become citizens of the countries in which they resided and to leave countries where they faced trouble and persecution. He was known for his business acumen, and his extensive private holdings included hotels, airlines, and newspapers. Through organizations such as the Aga Khan Foundation, the imamate funded aid agencies offering educational, health, and housing services in South Asia and East Africa. The Aga Khan Fund for Economic Development (AKFED) invested in development programs to promote manufacturing, tourism, and financial services. He also continued his family's extensive horse-breeding enterprise.