Muhammad was succeeded by his younger brother Raja Ali Khan. The claims of his minor son Hasan Khan were put forward by a party of nobles but they were not successful in their plot.
Immediately after his accession, Raja Ali Khan was faced with the problem of dealing with the Mughals who were now determined to extend their sway to Deccan.
Emperor Akbar had sent an expedition to chastise the Khandesh ruler for not sending the tribute regularly. But it had to be diverted to Gujarat where the rebel Mirza Muzaffar Hussain had taken refuge. The Mirza, however, fled to Khandesh and was captured by Raja Ali who sent him to the Mughal court.
Fortunately for the Khandesh ruler, Akbar was engaged in suppressing rebellions in Bengal and Bihar and, therefore, he was left in peace for six years. Raja Ali was, however, fully aware of the danger and tried to forge a united front of Deccani powers but the efforts met with little success.
Akbar sent his emissaries to the Raja to accept Mughal suzerainty. He was reluctant in the begining but later on decided to throw in his lot with the Mughals. He helped the Mughal governor of Malwa, Mirza Aziz Koka, to place Prince Burhan on the Nizam Shahi throne in 1589. It enabled him to rule in peace for another 5 years.
Raja Ali had meanwhile completely aligned himself with the Mughals and even married his daughter to Prince Murad. He actively helped the Mughals in their campaign against Gujarat in 1596 and later on against the combined armies of the Deccan rulers of Ahmadnagar, Bijapur and Golkonda in 1597. Though the Mughals won in the latter campaign, Raja Ali Khan lost his life on the battlefield.