His real name was Mohammad Usman, who was born in 1143 A.D. (538 A.H) in Marand, a small town on the outskirts of Tabraiz in Iran, his father was Syed Ibrahim Kabeeruddin, a dervish. He was 13th in the lineage of Hazrat Imam Jafar Sadiq.

Lal Shahbaz had memorized the Holy Quran at the age of seven and after completion of his education he left home for Baghdad where he met Baba Ibrahim Karbalai and became his Mureed (disciple). Baba Ibrahim was the spiritual follower of Hazrat Jamal Mujjarrad.

Lal Shahbaz attained Khilafat (heirness) and received sacred gifts, including a stone, which was attributed to Hazrat Imam Zainul Abedin, from his Shaikh Baba Ibrahim. It is said to be the same stone that hangs on his tomb. Following instructions from his Shaikh, Lal Shahbaz left Baghdad for Sindh (A Province of Pakistan). Sindh's capital was Multan at that time and Prince Khan Shaheed was the governor. Like his father Ghayasuddin Bulban, Prince Khan Shaheed was a patron of dervishs and saints. Khan Shaheed was so impressed by the saint that he begged him to stay in Multan. He even wished to construct a Khanqah (Spiritual school) for him but Lal Shahbaz did not agree as he had decided to finally settle in Sehwan.

While travelling from Baghdad to Sindh, Lal Shahbaz graced various places for his "Chillakushi" (Spiritual contemplation). Among them the "Panjgur" valley of Makran (Balochistan province) where a place called Dasht-e-Shahbaz is famous. It said that many Baloch tribes became his followers there. Even Babar mentions Dasht-e-Shahbaz in his chronicles Babarnama.

On his way from Balochistan to Sindh, he also stayed in Karachi's Manghopir area for "Chillakashi", and it is said that Manghopir's natural warm fountain is a miracle of Lal Shahbaz Qalandar, that warm fountain started to flow from beneth the hill, on which Lal Shahbaz sat for Chillakushi. After passing hundreds of years, that warm fountain is still flowing continuously. There are also numerous other places which are attributed to Lal Shahbaz's "Chillakushi." They include Shah Sadruddin's shrine in Sukkur and Shah Gurio near Badin. These places show Lal Shahbaz's extensive travels throughout Sindh.

On the time of arrival of Lal Shahbaz Qalandarin Sehwan, there were already living many sufis & mystics. So when he arrived there, one mystic sent him a bowl of milk filled to the brim, indicating that there was no room for one more. He returned the bowl floating a single flower on the top, indicating that he could live there as the flower hadn't made the milk to fall from the bowl. So after getting this reply, no sufi & mystic objected again.

In Multan, Lal Shahbaz met Hazrat Ghaus Bahauddin Zakaria Multani of the Suhrwardiya order, Baba Fareed Ganjshakar of Chishtiya order, and Makhdoom Jahanian Surkh Bukhari. The attachment was so cordial and spiritual that their friendship became legendary and they were known as "Chahar Yar" (Four Friends). According to some historians, the four friends visited various parts of Sindh and Punjab.

Almost all saints of Sindh including Shah Abdul Latif Bhitai, Makhdoom Bilawal, Makhdoom Jafar Boobkai, Sachal Sarmast and Qadir Bukhsh Bedal were devout followers of Lal Shahbaz Qalandar.

The saint died in 1252 AD in Sehwan.