Al-Hakim co-founded the modern Islamist political movement in Iraq in the 1960s, along with Ayatollah Sayed Mohammed Baqir Al-Sadr, with whom he worked closely until the latter's death in 1980. Though not among the most hard-line of Islamists, Al-Hakim was seen as dangerous by the ruling Baath regime, largely because of his agitation on behalf of Iraq's majority Shia population (the ruling regime was comprised mostly of Sunnis). This led to his arrest in 1972, but he was released shortly thereafter.
He was partially blamed for the uprising in Najaf that occured in February 1977, and so was arrested again, and this time sentenced to life imprisonment. However, his sentence was commuted and he was released in July 1979. The subsequent eruption of war between Iraq and (largely Shia) Iran led to an ever-increasing distrust of Iraq's Shia population by the rulling Baath party; combined with his previous arrests, this convinced Al-Hakim that it was impossible to continue his Shia advocacy in Iraq, and in 1980 he fled to Iran.
Safely in Iran, Al-Hakim became an open enemy of the Baathists, forming the Supreme Council for the Islamic Revolution in Iraq (SCIRI), a revolutionary group dedicated to overthrowing Saddam Hussein's regime. In 1983, Hussein responded by arresting 125 members of Al-Hakim's family who had remained in Iraq, and executing 18 of them. This further embittered Al-Hakim towards the Baathists, and towards Hussein in particular. With Iranian aid, SCIRI became an armed resistance group, periodically making cross-border attacks on Iraqi facilities, maintaining covert connections with resistance elements within the country, and generally being a perennial thorn in Hussein's side.
Al-Hakim returned to Iraq in May 2003 following the overthrow of Hussein's regime by the US-led invasion of Iraq. There he emerged as one of the most influential Iraqi leaders, with his longtime opposition to Hussein gaining him immense credibility, especially among the majority Shia population.
Initially he was very critical of the US-led occupation of Iraq, saying "we do not put confidence in the Americans, they have always acted against the interests of the Iraqi people" and urging Iraqis not to follow the US's administration's dictates. However, he did give the US credit for overthrowing the hated Baathist regime, and through the summer of 2003 indicated some willingness to work with the Americans in setting up a civilian government in Iraq. Al-Hakim's brother and fellow Muslim leader, Ahmed al-Barak was appointed to the Iraq interim governing council and the two worked closely together. By the time of his death, he remained distrustful, but urged Iraqis to abandon violence, at least for the time being, and give the interim government a chance to earn their trust.
It is unclear (as of late August 2003) who was behind the massive bomb attack that killed him. A spokesman for SCIRI in London suggested that supporters of Saddam Hussein may have been behind the attack; others suggest it may have been orchestrated by Sunnis not necessarily connected to Hussein who are opposed to the increasing Shia influence in the country; a few suggest it may have been carried out by hard-line Shia groups critical of Al-Hakim's increasingly conciliatory line towards the United States. Still others have pointed out that Israel has much to lose if an Islamist government took power in Iraq and that Mossad infiltrated Iraq even before the invasion. However, as his assassination comes in the midst of a pattern of violence against Shia clerics in Najaf in recent weeks (Al-Hakim is the fourth to be assassinated), it is considered likely that the attack was motivated by anti-Shia sentiment rather than by a conflict between Shia moderates and hardliners.
On August 30, Iraqi authorities arrested four people in connection with the bombing: two former members of the Baathist regime from Basra, and two non-Iraqi Arabs from the puritanical Wahhabi sect.