He moved to Christiania (now Oslo) in 1833, where he first took employment with the trading firm of H. Gulbranson.
In 1844, he founded Nedre Vøiens Bomuldsspinderie (later known as Knud Graah & Co A/S) to operate a cotton mill in the Oslo neighborhood of Nydalen.
Graah obtained textile machines and skilled workers for the operation of the new cotton mill from Great Britain.
In the 1890s, the factory was expanded and modernized with electric power.
His granddaughter Lille Graah was interned at and survived the Ravensbruck Concentration Camp during the German occupation of Norway.