His father, Aminu Sanusi, was a prince and diplomat who served as the ambassador to Belgium, China and Canada, and later permanent secretary of the Ministry of Foreign Affairs.

He became fluent in Arabic and also studied the Qur'an, law (fiqh) and philosophy (falsafa), amongst others, he read the works of prominent Western thinkers and Islamic authorities and was also exposed to the four Sunni madhhabs of Hanafi, Maliki, Shafi'i and Hanbali.

His dissertation was titled: Codification of Islamic Family Law as an Instrument of Social Reform: A Case Study of the Emirate of Kano and a Comparison with the Kingdom of Morocco.

[26] He also introduced a consolidation process which reduced the number of Nigerian banks through merger and acquisitions, in a bid to make them stronger and more accountable to depositors.

[29] Sanusi developed the cashless policy – whereby financial transactions are not conducted with money in the form of physical banknotes or coins, but rather through the transfer of digital information (usually an electronic representation of money) between the transacting parties;[30] he also introduced and supported the establishment of Islamic banking in Nigeria, a move which was criticized by the Christian Association of Nigeria.

[31] He also clashed with the National Assembly, over its budgetary spending of 25% of all government revenue;[32][33] and rejected the International Monetary Fund insistence for a currency devaluation.

The Banker magazine recognised him as the 2010 Central Bank Governor of the Year, for his reforms and leading a radical anti-corruption campaign in the sector – the first of its kind during the 2007–2008 financial crisis.

[38][39] In December 2013, Sanusi in a leaked letter to President Goodluck Jonathan revealed that the Nigeria National Petroleum Corporation (NNPC) failed to remit US$48.9 billion of government oil revenue to the central bank[40][41] – the NNPC has a history of financial irregularities and oversees the corrupt petroleum industry in Nigeria.

On 20 February 2014,[42] after a series of public investigations and raising the alarm on the US$20 billion NNPC scandal, Sanusi was suspended as Governor of the Central Bank of Nigeria by President Goodluck Jonathan.

[45] Three days later, Sanusi won a court case against the SSS and federal government, after he was detained and his international passport confiscated by the State Security Service.

[54] He was crowned Sarki Muhammadu Sunusi II (anglicized as Sanusi) on 9 June 2014, the fifty-seventh monarch of the ancient-city Kano; hierarchically the fourth-most-important Islamic traditional ruler in Nigeria after the Sultan of Sokoto, Shehu of Borno and Emir of Gwandu.

[55] In November 2014, after Sanusi urged his followers to fight Boko Haram, the Great Mosque of Kano was bombed, with over 150 casualties.

[57] Sanusi replied that he is "safe with Allah", and likened Shekau's extremist comments (describing Sufis as unbelievers) to those of the heretical Islamic preacher Maitatsine.

Major developments, such as the drafting of a new Muslim family law,[59][60] construction of a 40,000 books library and vernacular modernization of the 15th century palace took place;[61] and the Durbar festival was promoted internationally.

[78] Sanusi was in his private residence in Gidan Rumfa when he learnt of his removal, while awaiting for state officials to formally serve him the deposition letter a contingent of police, military,[79] and security operatives stormed the palace.

[81] He also urged them to declare bay'ah to his successor Aminu Ado Bayero, and stated "It is a thing of pride that made us to rule and end in the same fashion as the Khalifa," in reference to his grandfather Muhammadu Sanusi I, who was also deposed and exiled in 1963.

[83] Initially wanting to serve his exile in Lagos with his family,[84] his request was denied and was later escorted out of the palace under heavy guard to a military air base.

[89] On 13 March, a Federal High Court in Abuja ordered the release of Sanusi,[90] he subsequently left Awe together with Governor Nasir El Rufai,[91] after leading Friday prayers in full regalia to Lagos.

He is a visiting scholar at the University of Oxford’s African Studies Centre, where he is set to publish a book about his role as central bank governor during the 2007–2008 financial crisis.

[98] On 10 May 2021, Sanusi was appointed as leader (khalifa) of the Tijaniyyah Sufi order in Nigeria, an important position which was held by his grandfather, with immense religious authority in West Africa.

He has debated and authored a number of papers articulating his views on:[101] Sanusi's position has two underlying themes: Islam is concerned with justice and should not be a tool for self-seeking political agendas, and the violent persecution of the Sufi orders by Wahhabist fundamentalists counters genuine Muslim interests.

[109][110] He has also defended his views on Islam in Africa[111] – and has opposed the external influence on the continents religious life, "Wahhabism and Salafism have a certain intolerance in common with groups such as Boko Haram.

[126] The PBS segment quoted American and British officials that former petroleum minister Diezani Alison-Madueke might have organized a diversion of $6 billion (₦1.2 trillion) from the Nigerian treasury.

[129] Sanusi has criticised Buhari's anti-corruption war, arguing that his administration's foreign exchange policy is creating a nouveau riche class and promoting the rentier economy.

[145] In August 2023, during the crisis following the coup d'état in Niger, he went to Niamey to mediate with the putschists, and notably met Abdourahamane Tchiani.

[158] Patrilineal descent is the principle behind membership in royal houses, as it can be traced back through the generations, which means that Sanusi is a member of the Dabo dynasty.