Ali ya haife shi ne a Bombay, British India, ɗan Yusuf Ali Allahbuksh (ya mutu a 1891), wanda aka fi sani da Khan Bahadur Yusuf Ali, Shi'i a cikin al'adar Dawoodi Bohra, wanda ya juya baya ga aikin kasuwanci na al'ummarsa kuma a maimakon haka ya zama Mai binciken 'Yan Sanda na Gwamnati. Bayan da ya yi ritaya ya sami lakabi na Khan Bahadur don aikin jama'a. A matsayin yaro Yusuf Abdullah Ali ya halarci makarantar Anumanjayat Him-ul-Islam kuma daga baya ya yi karatu a makarantar mishan Wilson College, duka a Bombay. Ya kuma sami ilimin addini kuma daga ƙarshe zai iya karanta dukan Kur'ani daga ƙwaƙwalwar ajiya. Ya yi magana da Larabci da Ingilishi sosai. Ya mai da hankali ga Kur'ani kuma ya yi nazarin sharhin Kur'ani tare da waɗanda aka rubuta a farkon zamanin tarihin Islama.
Larabci da Ingilishi