After a short spell in Delhi, at Advertising and Sales Promotion Co. where he handled tourism publicity, he moved to Mumbai, to work with Air India as no. 2 in the Publicity Department.

In Air India, Muzaffar Ali had a very successful term of 10 years. It broadened his vision, promoted India abroad through its arts, crafts and culture, set up a department promoting international conferences in India. This included conceptualizing and setting up of an international conference centre and hotel in Srinagar in Kashmir. This is the present Centaur Lake View Hotel and the government owned Sher-e-Kashmir Conference Centre, of which he is on the Board of Governors.

In 1972, Muzaffar Ali exhibited his collages at Pundole Art Gallery, Mumbai.

His first feature film Gaman was made in 1978 which received the special award of the jury, a Silver Peacock at the 7th International Film Festival, New Delhi.

In 1981 he resigned from Air India to complete his most acclaimed film Umrao Jaan and to fully devote his time to films and art. Umrao Jaan received several awards at the 29th National Film Festival including Best Music, Best Actress, and Best Female Playback Singer. Along with this it received the prestigious Filmfare Award for Best Director and Music.

In 1982 Muzaffar Ali entered the field of documentary and short films, mainly centered on Awadh, craft, culture, exploitation of women and Sufism.

In 1983, the then Prime Minister, Mrs Indira Gandhi appointed Muzaffar Ali on a National Committee for software development for the newly opened satellite TV in India.

Having left Air India, Muzaffar Ali realized that painting expressed a more intimate form of aesthetics and in 1983 he exhibited a series of collages at the Taj Art Gallery, Mumbai