Changes brought during his rule included the creation of government posts, military reform, the introduction of the first postal service in Afghanistan and the first attempts by an Afghan leader at promoting the Pashto language.

After being gifted a battery of mountain guns and several howitzers by the British in 1868, Sher Ali realised the potential of breech-loading artillery and was determined to modernise Afghanistan's arsenal.

Whilst his early attempts failed, Sher Ali's craftsmen had soon established new workshops at the Bala Hissar Arsenal and began to produce four to five modern breechloaders each month.

Despite his successes in producing relatively modern weapons and equipment, poor discipline and a lack of competent officers meant the new cannons were quickly captured by the British during the Second Anglo-Afghan War.

In 1878, the fragile neutrality fell apart with Sher Ali Khan's resisting of British demands for Afghanistan to accept a permanent envoy in Kabul.