He was a powerful half-brother of Emir Dost Mohammad Khan, the eventual ruler of Afghanistan who seized control of Kabul from him.

Prior to and during the reign of Dost Mohammad Khan, Sultan Muhammad Khan Telai was chief minister and governor of various regions of Afghanistan, including Kabul, Peshawar and Kohat (the latter two part of Pakistan now).

He was the first of the Musahiban, a Mohammadzai dynasty that began with him and ruled Afghanistan for more than 150 years, in various forms such as emir, king or president from 1823 to 1978.

Sultan Mohammad Khan's wealth, along with his immense love for fine goods like luxurious robes, led to his family giving him his nickname "Telai", meaning golden.

He and the Muhammadzai leaders in general were known for having a great number of wives in order to unify the Afghan tribes and ethnic groups.