Ali was known professionally by his full name, Mahershalalhashbaz Ali, from 2001 until 2010, when he began to be credited as Mahershala Ali. Ali had considered shortening his name for a while, saying that using his full first name was "a crazy thing to do considering that we're in Hollywood", although he had never been pressured by managers or agents to change it. He decided to use a shorter version of his first name after being told that his full name was too long to fit on the poster for the film The Place Beyond the Pines. He did not want the alternative of M. Ali to represent himself on the poster, so he chose to adopt the shorter version of his name.

He elaborated in an interview to Vanity Fair in October 2016:

"I think if you have any desire to be a leading man or to really carry some of these stories, there's this relationship that has to be cultivated with an audience. People have to be able to say your name. I didn't want a couple of syllables to get in the way of me having the fullest experience as an actor."

He is known for his portrayal of Remy Danton in the Netflix series House of Cards, Cornell Stokes in Marvel's Luke Cage, Colonel Boggs in The Hunger Games: Mockingjay – Part 1 and The Hunger Games: Mockingjay – Part 2 and Tizzy in the 2008 film The Curious Case of Benjamin Button, his first major film role. Other notable films include Predators, The Place Beyond the Pines, Free State of Jones, and Hidden Figures.

For his performance as mentor and drug dealer Juan in the drama film Moonlight (2016), Ali received universal acclaim from critics and won the Academy Award for Best Supporting Actor, the SAG Award and the Critics' Choice Award for Best Supporting Actor and received a Golden Globe and a BAFTA Award nomination. At the 89th Academy Awards, he was the first Muslim actor to win an Oscar.

In 2017, Ali joined the video game Madden NFL 18's story mode Longshot, in which he played Cutter Wade, the father of protagonist Devin. He played Don Shirley in the 2018 film Green Book, receiving his second Academy Award for Best Supporting Actor, Golden Globe Award for Best Supporting Actor – Motion Picture and the BAFTA Award for Best Actor in a Supporting Role.

Ali starred as Arkansas State Police detective Wayne Hays in the third season of the HBO series True Detective, which premiered on January 13, 2019, in the United States. On Rotten Tomatoes, the site's critical consensus reads, "Driven by Mahershala Ali's mesmerizing performance, True Detective's third season finds fresh perspective by exploring real world e…

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Ali converted to Islam in 2000, changing his surname from Gilmore to Ali. In interviews, he has described being the subject of racial profiling at airports and banks following the September 11 attacks.

He is married to Amatus Sami-Karim, an actress and musician. Their first child, a daughter, was born in February 2017.

Ali is a devout fan of hip hop and has said within various interviews that Cambatta, Planet Asia, Skyzoo, Blu, Ka, Roc Marciano, Mach-Hommy, Pink Siifu, Fly Anakin & Mutant Academy, Mick Jenkins, Sage Elsesser, EARTHGANG, Benny The Butcher, Conway The Machine, Westside Gunn, Hus Kingpin & SmooVth are amongst his favorite artists.

In October 2023, Ali signed the Artists4Ceasefire letter calling for a ceasefire in the 2023 Israel-Hamas War. In January 2024, he showed further support for Palestinians in Gaza by reciting the poem "Longing for Haifa" by Palestinian poet Mohammed al-Qudwa in a video for social media, and encouraging his followers to donate to al-Qudwa's fundraiser so that the poet and his family could leave the Gaza Strip.

• Corner Ensemble (2006)
• Curb Side Service (2007)