Khurshid obtained his Bachelor of Arts degree from the Pakistan Military Academy, Kakul in 1955 and post graduated from Command & Staff College, Quetta in 1967.
He obtained a master's degree in strategic studies from the National Defense College, Rawalpindi in 1975.
His son Naushad Ali Khan was Chief Commissioner Income tax.
Khurshid Ali Khan served as the Governor of the North-West Frontier Province from 1993 to 1996 during Prime Minister Benazir Bhutto's government.
His funeral prayers were offered at Wazirabad Dargai in Malakand where he was buried with full military honours in his ancestral local graveyard.