He is well-known for an attempted schism in which he claimed leadership over his half-brother ʻAbdu'l-Bahá, and was rejected by the overwhelming majority of Baháʼís, who regard him as a Covenant-breaker.

[2] His schism was short lived and no longer exists; by the 1960s his descendants had largely melded into Muslim society and had no collective religious life.

As a teenager in Edirne, he began transcribing the writings of Baháʼu'lláh, and attempted his own claim to divine revelation, for which he was publicly chastised by his father.

[7] After four years, the covert opposition became a campaign of open hostility, including forged documents and spurious complaints to the Turkish authorities that put ʻAbdu'l-Bahá back into confinement.

Muhammad ʻAlí took the opportunity of ʻAbdu'l-Bahá's death in 1921 to revive his claim to leadership and tried to seize the Baha'i properties in the Haifa/Akka area, but was ultimately unsuccessful.

During the final days in Adrianople, Mírzá Muhammad ʻAlí wrote about eighty letters to the believers of the Baháʼí Faith, such as those in Baghdad and its surrounding towns.

[6] However, his attempt to occupy the Shrine of Baháʼu'lláh by force left him on the losing end of a legal battle that removed any rights he had to the property.

In the ʻAkká area, the followers of Muhammad ʻAlí represented six families at most, they had no common religious activities,[5] and were almost wholly assimilated into Muslim society.