On first October 1906 a 35-member delegation of the Muslim nobles, aristocracies, legal professionals and other elite section of the community mostly associated with Aligarh movement gathered at Simla under the leadership of Aga Khan to present an address to Lord Minto. They demanded proportionate representation of Muslims in government jobs, appointment of Muslim judges in High Courts and members in Viceroy's council etc. Though, Simla deputation failed to obtain any positive commitment from the Viceroy, it worked as a catalyst for foundation of AIML to safeguard the interests of the Muslims.
Under the active leadership of Aligarhians, the movements for Muslim separatism created political awakening among the Muslims on communal line. This ideology of political exclusivism in the name of religion gave birth to AIML in the session of All India Mohammedan Educational Conference held in Dacca (December 27-30, 1906). Nawab Salimullah, Chairman of the reception committee and convener of the political meeting proposed the creation of AIML. A 56-member provisional committee was constituted with prominent Muslim leaders from different parts of the country. Even some Muslim leaders within Congress like Ali Imam, Hasan Imam, Mazharul Haque (All Barristers from Bihar) and Hami Ali Khan (Barrister from Lucknow) were included in the committee. Mohsin-ul-Mulk and Viqar-ul-Mulk were jointly made the secrearies. After the death of Mohsin-ul-Mulk in 1907, Viqar-ul-Mulk was in full control of the League. First session of the League was held at Karanchi on December 29 & 30, 1907 with Adamjee Peerbhoy as its President.
The formation of AIML was a major landmark in the history of modern India. The first formal entry of a centrally organized political party exclusively for Muslims had the following objectives:
1. To promote among the Muslims of India, feelings of loyalty to the British Government, and remove any misconception that may arise as to the instruction of Government with regard to any of its measures.
2. To protect and advance the political rights and interests of Muslims of India, and to respectfully represent their needs and aspirations to the Government.
3. To prevent the rise among the Muslims of India of any feeling of hostility towards other communities without prejudice to the afore-mentioned objects of the League.
Initially AIML remained a pocket organization of urbanized Muslims. However, the support of the British Government to the political Islamists in their non-secular intention as well as contemptuous attitude towards majority rule helped the League to become the sole representative body of Indian Muslims. To confront the challenge of modern political system, the AIML successfully achieved the status of separate electorates for the Muslims within three years of its formation. It was the first big achievement of the party, which granted separate constitutional identity to the Muslims. Lucknow Pact in 1916 put official seal on the separate identity of Muslims, which was another landmark in the separatist movement launched by the AIML.