Alladiya Khan was born in Rajasthan in a family of musicians. Though his father Ahmed Khan died early, his uncle Jehangir Khan taught him Dhrupad for 5 years and then khyal for another 8 years.

Alladiya Khan served in the court of various kings of Rajasthan including that of Amlata. He sung so well and so much for the kings that he nearly lost his voice due to hours of riyaaz (practice). While trying to regain his voice he developed a new and profound style of singing by which he could sing without compromising the purity of raga but the passage, taans, and creativity of singing the raga. Later he settled down in Kolhapur as the court musician of the local king, Shahu Maharaj. In 1922 he moved to Mumbai after the king died. With his distinguished reputation, Ustad Alladiya Khan became a gem among the many masters in Mumbai. He taught many disciples and sung in many mehfils in Mumbai to which his reputation as an academic grew.

His autobiography, as narrated to his grandson Azizzudin Khan Sahab, is available in English translation, as My Life, translated with and introduction by Amlan Dasgupta and Urmila Bhirdikar, published by Thema, Kolkata, 2000

Alladiya Khan was acknowledged for his creation and resurrection of many complex Raags such as Nat Kamod, Nat Bilawal, Sampoorna Malkauns, Basanti Kanada and many more. Many of these Raags were originally created and sung by the Havelis in northern Rajasthan, where Khansahab grew up. Hearing the Haveli sangeet Khansahab took many of the Raag-based Bhajans (either taking the Raag or Bhajan) and created Raags and Bandishes with them. One of the Raags he resurrected was Raag Basanti Kanada. Few of the many Haveli sangeet dhrupads which he made into bandishes were the famous Raag Nayaki Kanada Bandish "Mero Piya Rasiya" and Bihagda Bandish "Ye Pyaari pag hole".