Muzaffar Ali was born into a feudal Muslim family of Uttar Pradesh. His father was the Raja of Kotwara, an estate in the Gola Gokaran Nath Subdivision of Lakhimpur Kheri district, while his mother hailed from a similar land-owning family of nearby Sheikhupur in Budaun district. He attended La Martiniere college in Lucknow. His son Shaad Ali is a film director in Bollywood. Muzaffar Ali is married to Mira.

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