In the India Office Records, Political and Secret Department Records (1756–1950), Category L/P&S, Record 5/250, 3/79, one comes across the Fortnightly Report (February 1947) to the Viceroy by the then Governor of Punjab Sir Evan Jenkins. According to this report when inquired about the Pakistan project, Khawaja Nazimuddin candidly told him that ″he did not know what Pakistan means and that nobody in the Muslim League knew.″ This remark clearly shows that so few as six months before the creation of Pakistan, even senior Muslim League Leaders had no clarity as to the basic features of the State they were asking for. ()

Nazimuddin was born into an aristocratic and wealthy family of the Nawabs of Dhaka, Dacca, Bengal, on 19 July 1894. He was the maternal grandson of Nawab Sir Khwaja Ahsanullah and his mother, Bilquis Bano, was notable for her own statue. Nazimuddin had a younger brother, Khwaja Shahabuddin, who would later played a vital role in national politics onwards. Being of Bengali-Kashmiri descent, his family spoke both Urdu and Bengali. They were the first cousin of Nawab Khwaja Habibullah son of Nawab Sir Khwaja Salimullah Bahadur who helped laid foundation of Muslim League in 1906.

Nazimuddin returned to India to join his brother Khwaja Shahbuddin from England, taking interest in civil and public affairs that led him to join the Bengali politics. Both brother joined the Muslim League, and Nazimuddin successfully ran for the municipality election and elected as Chairman of Dhaka Municipality from 1922 until 1929. During this time, he was appointed as Education minister and later secured a political appointment in Viceroy's Executive Council in 1934 which he served until 1937.

He was appointed a Companion of the Order of the Indian Empire (CIE) in 1926, and was knighted in 1934 by the King-Emperor, George V, when he was appointed a Knight Commander of the Order of the Indian Empire (KCIE).

By 1934, the family had estates that covered almost 200,000 acres and was well spread over seven district of Eastern Bengal, together with Shillong and Assam with an yearly rent of ₤120,000 ($2,736,497.94 in 2017). By 1960s, the majority of estate was relocated from East Pakistan to the different areas of Pakistan, leaving very little of his estate in East.

In a view of attempting to improve the economy and internal security, Governor-General Malik Ghulam asked Prime Minister Nazimuddin to step down in the wider interest of the country. Prime Minister Nazimuddin refused to oblige and Governor-General Malik Ghulam used reserve powers granted in the Government of India Act, 1935, dismissed Prime Minister Nazimuddin.

He participated in regional elections held on 1937 on a Muslim League's platform but conceded his defeat in favor of Fazlul Haq of Krishak Praja Part (KPP) who was appointed as Prime Minister of Bengal, while assuming his personal role as member of the legislative assembly.

Due to his conservative elite position, he became close associate of Muhammad Ali Jinnah, then-President of Muslim League, who appointed him as a member of the executive committee to successfully promote Muslim League' party agenda and program that gained popularity in East Bengal. In 1940–41, Nazimuddin broke away from the coalition led by Premier Fazlul Haq and decided to become a leader of the opposition, leading campaign against Haq's premiership and primarily focused on Bengali nationalism issues. In 1943, Nazimuddin took over the government from Premier Haq when the latter was dismissed by the Governor John Herbert amid controversies surrounding in his political campaigns. During this time, Nazimuddin played a crucial political role for the cause for the separate Muslim homeland, Pakistan. About his role, he was asked about the "Pakistan question" by British Governor Richard Casey in 1945 but he showed very little and no interests in discussing the existence of the movement and reportedly quoting: he did not know what Pakistan means and nobody in Muslim League knew."

Upon the formation of the coalition government in an agreement facilitated between Muslim League and the Krishak Praja Party, Nazimuddin was appointed as the home minister under Haq's premiership., which he continued until 1943.

From 1945–47, Sir Nazimuddin continued to be served as the chairman of the Muslim League in East Bengal, ardently supporting the political cause for Pakistan against the Congress Party. During this time, he had been in brief conflict with Premier Suhrawardy and strongly opposed the United Bengal Movement and led a strong parliamentary opposition in the assembly against Suhrawardy's administration in April 1947. The conflict between two men mainly existed because Suhrawardy had represented the middle class while Nazimuddin was representing the aristocracy in the assembly.

On August 14 of 1947, Governor-General Muhammad Ali Jinnah relinquished the party presidency of the Pakistan Muslim League (PML) to Khawaja Nazimuddin who took over the party of President of Pakistan Muslim League (PML), due to his party electoral performance. On 1 November 1947, he was appointed as acting Governor-General in the absence of Governor-General Jinnah due to worsening health, and eventually appointed as Governor-General after passing of Muhammad Ali Jinnah, in a crucial support provided by Prime Minister Liaquat Ali Khan on 14 September 1948 to the President Nazimuddin. His oath of office was supervised by Chief Justice Sir Abdul Rashid of the Supreme Court of Pakistan, in attendance with Prime Minister Liaquat Ali Khan.

In 1949, Governor-General Nazimuddin established the parliamentary committee, the Basic Principles Committee, on the advice of Prime Minister Ali Khan to underlying basic principles that would lay foundation of Constitution of Pakistan.

In 1950, Nazimuddin released an official policy statement and declared that: "Pakistan would remain incomplete until the whole of Kashmir is liberated."

Nazimuddin's administration took place during a poor economy and the rise of provincial nationalism in four provinces and East Bengal which made him unable to run the country's affairs effectively. By 1951–52, the Muslim League had split into two different factions dominated by the Bengali chapter and Punjab-Sindh chapter, as those were the two largest ethnic demographics, but were separated by India.

In 1951, Prime Minister Nazimuddin's government conducted the country's first nationwide census where it was noted that 57% population of the country was Indian immigrants, mostly residing in Karachi that further complicated the situation in the country. In January 1952, Prime Minister Nazimuddin publicly announced in Dacca's meeting that: Jinnah had been right: for the sake of Pakistan's national unity, Urdu must be the official language of Pakistan–East and West. On 21 February 1952, a demonstration in the Bengali Language movement demanding equal and official status to the Bengali language turned bloody, with many fatalities caused by police firings. This demonstration was held when he declared Urdu the National Language of Pakistan, following the previous statement of Muhammad Ali Jinnah that Urdu shall be 'one and only' language of Pakistan.

In 1953, a violent religious movement led by far-right Jamaat-e-Islami began to agitate for the removal of the Ahmadi religious minority from power positions, and demanded a declaration of this minority as non-Muslims.

Nazimuddin then requested the Supreme Court of Pakistan's intervention against this action but the Chief Justice, Moh'd Munir did not rule on the legality of the dismissal, but instead forced new elections to be held in 1954. Governor-General Malik Ghulam appointed another Bengali Politician, Muhammad Ali Bogra who was then tenuring as the Pakistan ambassador to the United States, as the new Prime Minister until the new elections to be held in 1954. The dismissal of Sir Khawaja Nazimuddin's administration, the Prime Minister, by the Governor-General Malik Ghulam, signalled a troubling trend in political history of the country.

His younger brother, Shahabuddin, remained active in the politics and eventually ascended as Information minister in the President Ayub Khan's administration. Sir Khawaja died in 1964, aged 70. He was buried at Mausoleum of three Leaders in his hometown of Dhaka.

Even after his dismissal, he and his family remained active in parliamentary politics; his nephew, Khwaja Wasiuddin, an army general serving as GOC-in-C II Corps and later repatriated to Bangladesh in 1974.