The Kingdom of Rohilkhand was a petty kingdom under nominal Mughal suzerainty, that rose under the declining Mughal Empire in 1721 and continued to exist until 1774 when it was defeated by Oudh. The British transformed its significantly reduced borders into the princely state of Rampur. Nawab Ali Mohammed Khan became the first Nawab of Rohilkhand, having been previously elected as overlord by various Afghan chiefs at the age of fourteen. He would carve out the future kingdom from the collapsing Mughal Empire and go on to the found the Rohilla dynasty. The crown would go on being held by the Rohillas until the kingdom came to an end in 1774, and thereafter the same dynasty would rule over Rampur.

Most of Rohilkhand's borders were established by Ali Mohammed Khan and largely came into existence as a check to the power of Oudh State and in that capacity, Nawab Ali Mohammed was supported by the Wazir al Mulk, Qamarudin Khan. Nonetheless, the state grew far more influential with its borders extending to the boundaries of Delhi and Agra. In 1757, the powerful Maratha Empire defeated the Rohillas and Afghans near Delhi and Najib Khan was taken prisoner. In 1772, Rohillas were defeated by a larger Maratha force When they could not repay the debt, Nawab of Oudh invaded Rohilkhand in 1773. Most of the kingdom was annexed at the end of the First Rohilla War into Oudh, when the mismanagement of Hafiz Rehmat Khan along with the internal division of the Rohilla Confederation led to the weakening of central authority.

Ali Mohammed Khan was an enterprising soldier who established the kingdom of Rohilkhand. Rohillas are Afghans who migrated to north India during the 17th and 18th centuries. However, the Rohilla dynasty descended from Nawab Ali Muhammed Khan, who was a Jat boy of age eight when he was adopted by the chief of the Barech tribe, Sardar Daud Khan Rohilla. Daud Khan was the son Shah Alam, who belonged to the Barech tribe. After his murder by the Raja of Kumaon, Ali Mohammed rose as the 14-year-old leader of his foster father's militia. Due to the role he played in the establishment of Rohilkhand and in the general history of Rohillas, he gained recognition as a Rohilla chief, although he was not Afghan by birth. In the 19th century, descendants of Ali Mohammed Khan, specifically the Nawabs of Rampur, started claiming that he was a Barha Sayyid and began using the title of Sayyid. However, they could not present any pedigree or valid historical proof in the support of this claim. The Nawabs even sought service of a prominent religious leader of Rampur, Najmul Ghani for establishing ancestry from Ali, which was widely rejected.

With the death of Aurangzeb and subsequent collapse of administration under the emperor Muhammad Shah, Mughal Authority in the area collapsed, Rohilla immigration increased, although there were descendents of Pathans long domiciled in India. The Mughal authority was further weakened by Nader Shah's invasion of India, allowing Ali Muhammad Khan to extend his power. The Rohillas began to emerge as a mixture of old domiciled Indian Pathan families, Indian converts to Islam and new adventurers from the northwest, who were in the process of developing a real or fictive kinship based on newly forged marriage alliances.

A man of ability and courage, Ali Mohammed Khan attracted many adventurers by his great reputation and arose as the most powerful man in Katehir. Ali Muhammad Khan distinguished himself by helping in suppressing the rebellion of the powerful Indian Muslim Barah Sayyids, who were formerly de-facto rulers of the Mughal Empire, and who had under their chief Saifudddin Barha put the Mughal governor Marhamat Khan and all of his followers to death. As a reward Ali Muhammad Khan was given the title of Nawab by Muhammad Shah in 1737. He gained favour with the lower rungs of society and by the invasion of Nadir Shah in 1739 he further strengthened his position attractinga large swath of afghans who took employment with him. For the subsequent five years, his authority was left unchallenged. ^{[citation needed]}

In 1745 a quarrel arose between Ali Mohammed and Safdar Jang the Subedar of Oudh. Retainers of Ali Mohammed seized the property of servants belonging to Safdar Jang. Safdar Jang who was already jealous at the growing power of Ali Mohammad went to the Emperor Muhammad Shah, and through him ordered the return of the confiscated property as well as the arrest of the Rohillas in-charge of the confiscation. After the refusal of Ali Mohammed, Safdar Jang led an Imperial expedition together with the Emperor present in person and after being deserted by his men Ali Mohammed was captured and taken to Delhi.^{[citation needed]}

He was treated honourably and respectfully by the Emperor, in large part due to his influence among his adherent who were still at large. The necessity to consulate Ali Mohammed led to his appointment as Governor of Sirhind (the area between Jummuna and Sutlej).^{[citation needed]}

In 1748 the invasion by Ahmed Shah Abidali allowed Ali Mohammed the opportunity to return to Katehir and re-establish his rule. Upon his return, he was rejoined by most of his former men and soon he was virtually independent in his control of Rohilkhand. To ensure loyalty almost all positions of power were given to Afghan and several like Najib-ud-Daula received land grants.