Khalili's second Japanese-based collection is The Khalili Collection of kimono. The collection consists of three hundred years of the Japanese textile industry and contains over 450 garments. While the kimono's t-shaped design hasn't altered much over the centuries, yet the collection reveals an astonishing variety in kimono designs. The garments have been used to demonstrate gender, age, status and wealth throughout Japan's history. The collection represents four separate period's, the Edo period (1603-1868), the Meiji period (1868-1912), Taisho (1912-1926) and early Showa (1926-1989).

The Khalili Collection of Swedish Textiles comprises textile panels, dating between 1700-1900. The majority of the works are from a one hundred-year period, when little is known about the area of Scania, the southern-most region of Sweden. The textile collection contains art mostly made for wedding ceremonies in the region. While they played a part in the ceremonies, they were also a reflection of the artistry and skill of the weaver. Their designs often consist of symbolic illustrations of fertility and long life, along with a sense of hope and joy. The entire collection is made up of 95 pieces.

Spanish damascene metalwork collection, is one of the largest collections of its kind. The collection pay homage to the Zuloga family, who played a major part in the preservation of damascening in Spain. The collection contains some of the most important pieces commissioned by Plácido Zuloga between 1834-1910. Some of the pieces were originally acquired by the great 19th-century English collector, Alfred Morrison. The entire collection contains over 100 pieces, 22 of which are signed by Plácido Zuloga. The collection is said to be an excellent representation of Spanish metalwork art during the latter half of the 19th century.

The Japanese Art of the Meiji period collection is made up of the world's greatest collection of Meiji decorative art. It comprises over 1,400 pieces in the collection, including metalwork, enamels, Lacquerwork and ceramics. The pieces are from the period of Emperor Meiji's rule from 1868-1912. The period saw an art revolution in Japan, where traditional tastes in Japan were met with international tastes. From the beginning of Meiji's reign in Japan, European and international Collectors have avidly sought pieces of Japanese art from this era.

Khalili was born in 1945 in the city of Isfahan, Iran, the fourth of five children, to a Jewish family of art dealers and traders of artefacts. Khalili and his family moved to Tehran, Iran, when he was only a few months old. By the age of eight, he was accompanying his Father on buying expeditions, often buying items such as Persian lacquer and other Islamic arts.

Khalili completed his national Service in Iran as a medic in the Iranian Army, before leaving Iran in 1967 for the United States with $750 earned from sales of his book. He studied computer science and earned a BA degree in the subject at Queens College, City University of New York, and graduated in 1974.

He began visiting London auction houses in the mid 1970s, and established his own gallery in Mayfair, London between in 1978 to 1980. Khalili initially traded in Persian lacquerware, and subsequently wrote a thesis on the subject, receiving a PhD degree in Islamic art from SOAS, University of London in 1988. His focus on lacquerware also coincided with many undervaluing this art form. In 1978, the price of Islamic art fell substantially according to an article in Saudi Aramco World. Aramco World stated in the article that Khalili continued to invest in Islamic art during this period and this was one of the reasons he was able to acquire so many quality works for low prices.

In the mid-1980s, the scale of Khalili's collection greatly expanded. In the early 1990s, he began to publish a 27-volume catalogue of his Islamic art collection, for which he commissioned a number of leading Islamic scholars. In 1992, he was interviewed by The Independent following the launch of the first volume of this catalogue of Islamic art. According to the article, suspicions in the art industry were that Khalili was assembling the collection on behalf of a rich investor. The release of the collection under his own name stopped those suspicions and showed Khalili's collection as belonging to himself and his family.

In 1989, Khalili donated £600,000 to establish The Khalili Chair of Islamic Art at the School of Oriental and African Studies, University of London. He also gave a further £200,000 in 2003 for the refurbishment of the lecture theatre at the school. Furthermore, in 1992, he made an endowment of £51,000 to the University of Oxford for a Research Fellowship in Islamic Art.

In the 1990s, Khalili commissioned a series of five paintings by the Artist Ben Johnson called the House of Peace to promote "peace and harmony" between Judaism, Christianity and Islam. The foundation also donated thousands of copies of The Timeline History of Islamic Art and Architecture (Visions of Splendour) written by Khalili himself, to schools in the United Kingdom and Islamic countries.

In 1992, Khalili offered to lend his Islamic art collection to the British government for a period of 15 years and on condition it is publicly displayed in a "museum building in central London." It was suggested that the museum would be known as the Khalili Museum, with the running costs of the museum and insurance to be publicly funded. The offer was made with the potential for turning the donation into a gift at the expiration of the 15-year period. The Conservative Politician Lord Young of Graffham and the public relations executive Lord Bell lobbied the government to accept Khalili's offer. Many expressed an interest in the proposal by Khalili for a London-based Islamic museum, including Prince Charles.

Khalili founded the charitable Maimonides Interfaith Foundation in 1995 to promote "understanding, cooperation and peace between Jews, Christians and Muslims internationally through art, culture and education". The foundation created the Maimonides Interfaith Explorers, a free online educational resource for children aged 10 to 11.

In 1997, Khalili bought Bath House, an office building on Holborn Viaduct for £7 million. In 2007 planning permission was granted for an 11-storey office building called The Wave and subsequently in 2009 Khalili acquired the freehold from the crown estates. The building, which eventually completed in 2013, designed by the Architects Kohn Pederson Fox Associates. Since 2010 the project had been a partnership between Khalili's property company Favermead and AXA Real Estate Investment Managers. The new 230,000 sq ft building was later leased by Amazon in 2013. In 2014 the building became one of the 13 winners in the Urban Land Institute’s Global Awards for Excellence, citing the blending of modern and historic architectural elements.

Khalili has assembled eight distinct art collections under the auspices of the Khalili Family Trust and they are collectively referred to as the Khalili Collections. The collections are divided into Islamic Art, with artifacts dating from 700 to 2000; Hajj and the Arts of Pilgrimage from 700 to 2000; Aramaic Documents from 535BC to 324 BC; Japanese Art of the Meiji Period from 1868 to 1912; Japanese Kimono from 1700 to 2000; Swedish Textiles from 1700 to 1900; Spanish Damascened Metalwork from 1850 to 1900 and Enamels of the World from 1700 to 2000.

Through his foundations and trusts, Khalili has made many substantial donations to a number of different organisations, institutions, and charities. Donations in the field of education include an endowment of £2.5 million to the University of Oxford. The funds were used for the establishment of the Khalili Research Centre for the Art and Material Culture of the Middle East, which was opened by the Chancellor of Oxford University, Lord Patten, in July 2005. The Khalili Family Trust’s support continues to the present day, notably with another substantial donation in 2011.

In 2007 Khalili's wealth was estimated at £5.8 billion by the Sunday Times Rich List, but he was removed from subsequent editions of the list. In 2007 and 2008 Forbes estimated Khalili's wealth at $1.3 billion, but he dropped off the 2014 edition of the list. In 2008 The Art Newspaper wrote that 'a £1 billion valuation is believed more likely' than previously claimed higher amounts. Khalili has claimed that he has spent $650 million on art.

In a 2010 interview Khalili said that his collecting in the mid 1980s was funded by his dealings in venture capital, having profited from shares in a company that developed Technology to treat tumors, and that he made $15 million from the sale of a company that manufactured indigestion pills in 1987. In 1992, Khalili had described his wealth as deriving from "dealing in art, commodities and real estate". Khalili has said that his collecting was primarily funded by his property Investments from 1980.

In 2012, Khalili was honored by UNESCO as a goodwill ambassador for his work in the pursuit of peace, education and culture amongst nations. In his role as a Goodwill Ambassador, Khalili spreads the ideals of UNESCO through his position as a scholar, collector and philanthropist. He helps galvanize public interest and support for the purposes and principles of UNESCO to significant audiences.

He has made keynote addresses at the launch of the International Decade for the Rapprochement of Cultures in a UNESCO International Forum held in Kazakhstan, in 2013; at the UNESCO International Congress of May 2013 in China where he spoke about Culture: Key to Sustainable Development; and at the King Abdulaziz Center for World Culture in Saudi Arabia in December 2013 to mark the launch of the UNESCO forum on Building Knowledge Societies for Sustainable Human Development. In January 2015, he addressed dignitaries and journalists on Intercultural Dialogue in Fragmented Societies at the UNESCO headquarters as part of an event organised in the wake of the January 2015 Île-de-France attacks in Paris.