Born in Neuilly-sur-Seine, France, he was the son of His Highness Sir Sultan Muhammad Shah Aga Khan III (1877-1957) and his second wife Andrée Joséphine Carron. He was an uncle of His Highness Prince Aga Khan IV, 49th Imam of the Ismaelis.
He graduated from Harvard University, then attended the Centre of Middle Eastern Studies and started his career as publisher of Paris Review. In 1958 he became a consultant for United Nations Educational, Scientific and Cultural Organisation. He moved to the United Nations refugee agency in 1959, and was High Commissioner for Refugees from 1965 to 1977, during which time there were refugee crises in Biafra, Bangladesh, Vietnam, and Chile. In 1981 his attempt to become United Nations Secretary-General was vetoed by the Soviet Union. He was coordinator for United Nations humanitarian assistance in Afghanistan from 1988 to 1990, and a representative for humanitarian assistance in Iraq and Kuwait in 1991. He ran again for the post of Secretary-General in 1991, but failed to obtain it.
He primarily resided in Switzerland. On August 27, 1957, he married model Nina Dyer (1930-1965), formerly wife of Baron Hans Heinrich von Thyssen-Bornemisza. They divorced in 1962. He married Katherine Beriketti, formerly wife of Cyril Sursock, in 1972. She converted to Islam under the name of Aleya bint Abdullah.
Sadruddin Aga Khan was a collector of Islamic art and books. After leaving the United Nations he became an activist on environmental and humanitarian issues. He died in Boston, Massachusetts.