Allama Mashriqi Inayat Ullah Khan, the founder and leader of the Khaksar movement, was born in Amritsar on 25 August 1888. He did his matric in 1902. He took B.A. degree in 1906, and M.A. in 1907 from the Forman Christian College, Lahore. He did his tripos in mathematics with distinction and won a scholarship from University of Cambridge, England in 1909. He did his tripos in Persian and Arabic in 1911. He also did B.Sc. in physics and in mechanical science. He then went to study in Paris. On his return to India he joined the Indian Educational Service and was appointed Vice-Principal of the Islamia College, Peshawar, and promoted as its Principal. He was transferred to the Government of India as Under-Secretary in the Education Department.  

He resigned from Government Service in 1924 and wrote Tazkira, a commentary on Islam and the principles of self-reform. He was invited to Khilafat Conference held in Egypt in 1926. He went to Germany and met Hitler in 1929. In 1930 he returned from Europe and founded Khaksar movement in September 1931 with headquarter in Ichra at Lahore. He described the aim and object of his party in a second book called Isharat.  

Allama Mashriqi wanted to turn the Muslim community into a military body. He organized the Khaksars as soldiers of Islam to establish a sovereign state of Muslims. The volunteers of the Khaksar movement were expected to participate daily in military parade and social work. They were seen drilling and parading in playgrounds, streets and neighborhoods wearing khaki uniforms with spades on their shoulders. All members, regardless of rank, wore the same uniform; a khaki shirt with khaki pajama with military boots. They wore a red badge (akhuwat) on their right arm as a symbol of brotherhood. On their heads Khaksars wore a white cloth the length and width of one and one-half yards, which was secured around the head with a cotton string. All Khaksars carried a bailcha (spade). The flag of the Khaksars was a crescent moon and a star on a red background. 

Allama Mashriqi outlined twenty-four principles on 29 November 1936 in an address to a Khaksar camp at Sialkot. He conceded that the success of Muslim rule in India necessitated a regard for the religious and social sentiments of the various communities, the maintenance of their particular culture and customs, and a general tolerance. 

In 1939, Allama put forward three demands to the Punjab government; permission to own a broadcasting station, to collect zakat for establishing a baitulmal and for government servants to join the movement. Allama announced a recruitment drive to achieve strength of 2,500,000 by February 1940. Allama published a pamphlet titled, ‘Kia Hindustan main ainda hukamat ka miar aksariat ya khun hoga, which was considered objectionable by the government and banned and a security was demanded from the printers and publishers. On 28 February 1940, the Government of Punjab issued orders under Rules 58 and 54 of the Defense of India Rules prohibiting the performance of exercises of a military nature and carrying of arms in processions. These were regarded by the Khaksars as a challenge and the official organ, the Al-Islah, in its issue of 15 March 1940, condemned the orders as threat to the movement and declared that even if all the leaders were arrested the movement would not subside until every Khaksar had bathed in blood. The same issue of the paper contained the instructions under the title of ‘orders from headquarters’, that if the Punjab Government declares war, the provincial leaders of 15 provinces of India should send 30,000 Khaksar soldiers to Lahore within one week. All soldiers should obey the orders of Deputy Leader at Lahore whose orders will be absolute and final. The number of Janbaz (those pledged to give their lives) was 1,300. They were asked to arrive as soon as possible. In case war is declared, they should reach the bed of Sir Sikander within five days from every part of India, and surround it with corpses. 

On the morning of 19 March 1940, Khaksars were assembled in Unchi mosque. They brushed aside the small police force near the Tibbi Police Station. Additional police party barred their way to Badshahi mosque. It faced brickbats and soda water thrown by the prostitutes living there, followed by firing. 

Allama Mashraqi was arrested by the Delhi police on Sunday 19 March 1940. A police party aided by troops went to Idara-i-Alia (the Khaksar headquarters) at Ichra in Lahore about 5.45 pm. It was met by about 40 Khaksars drawn in two lines in front of their tents. They had bailchas and were new arrivals from NWFP. There was other detachment of Khaksars inside the Idara. A fight ensued and the Khaksars who died at Lahore on 19 March 1940 were 32. According to CM, 29 died and 217 arrested in Lahore. The IG KS Mir Afzal Khan and a sub Inspector were injured. Two constables were killed. SP Gainsford and DSP Beatty injured seriously and were admitted in Albert Victor Hospital. 

On Thursday 21 March 1940, Khaksars again defied ban in Lahore. They made sudden appearance about 3 p.m. from their hidden places and marched up and down Anarkali. FC Bourne Deputy Commission who had not recovered from the facial wound received on Tuesday conducted the operation assisted by Bennett DIG CID and city magistrate Sardar Abdus Samad Khan. Every attempt was made to induce them to lay down their arms but they refused. The tear gas squad threw about half a dozen bombs and eight Khaksars temporarily blinded were arrested. Two Khaksars were wounded and died bringing the total number of deaths to 31. 

A security of Rs. 3,000 was demanded from the editor, printer and publisher of al-Islah for publishing an article against the Punjab government and a security of Rs. 2,000 was demanded from the Din Duniya Press, were the al-Islah was published. The police arrested Mohd Hussain Bhatti district commander of the Amritsar Khaksars and two others. The house of Noor Mohd Kabuli organizer of the khaksars in Multan was searched and several bailchas were seized. In an article in al-Islah, Mashriqi ordered his janbaz to proceed to Lahore and lay a bed of corpses at Sir Sikander’s door. Allama Inayatullah Khan Mashriqi was detained to prevent him from acting in a manner prejudicial to the efficient prosecution of war. 

Five Pathan Khaksars in uniform with their bailchas came from Cambelpur district on 24 March 1940 and went inside the golden mosque at Dabbi bazar in Lahore and started parading in the courtyard. A large crowd gathered which was addressed by the Khaksars, one after the other. Police arrived and the city magistrate asked them to surrender but they refused. 

Nawab Bahadur Yar Jung accompanied by KS Mian Amiruddin went to jail to meet Mr. Shafi the Lahore Salar of the Khaksar and informed him that Mr. Jinnah was negotiating with the Government therefore he authorized them to ask them to surrender the bailchas and uniforms to the police and suspend their satyagraha, which they did. Nine Khaksars demonstrated in the Anarkali chowk near Nila Gumbad. Eight more Khaksars were arrested at Jullunder. 

On Tuesday 11 June 1940, Khaksars were rounded up at Lahore. 300 were arrested and one Khaksar was killed. On Wednesday 12 June 1940 Khaksars began using mosques as places of hiding. 

On 7th July 1940 Dr. Mohd Ismail Nami present leader of Khaksar movement ordered suspension of defiance of law till 27th July, pending negotiation by Jinnah with Punjab government. 

On Tuesday 2nd December 1941, Allama Mashriqui, was moved to Madras jail by Banglore express and kept in jail without any legal proceedings. In protest, he fasted to the point of death. Mashraqi was released from Jail on 19 January 1942, but his movements were restricted to Madras Presidency where he remained interned until 28 December 1942. Mashraqi arrived in New Delhi on 2 January 1943.  

Hundreds of letters and telegrams by Khaksars to Jinnah started arriving asking him to seek interview with Gandhi for a settlement and threatening Jinnah with dire consequences and abusing him as a tool of the British. Khaksar Mohd Sadiq alias Rafiq Sabir Mazangavi attacked Jinnah on the noon of 25th July 1943 in Bombay.  

The Council of AIML on Monday 15th November 1943 adopted a resolution, asking the members of the League not to become members of the Khaksar organization and to resign from it, as the organization has had shown by its writings and activities that it is pursuing a general policy which is hostile and antagonistic to the AIML. Hamid Nizami of Punjab and Ashraf of Meerut opposed it. 

Allama Mashriqi disbanded the Khaksar Tehrik on 4 July 1947 considering that the Muslims of India were satisfied with a new separate Muslim state of Pakistan