When his Father, Sheikh Zayed, became Emir of Abu Dhabi he was appointed as Ruler's Representative in the Eastern Region of Abu Dhabi (the mayor) and as Head of the Courts Department in Al Ain in 1966. Zayed was the Ruler's Representative in the Eastern Region before he became the Emir of Abu Dhabi. A few months later the position was handed to Tahnoun bin Mohammed Al Nahyan.
On 1 February 1969, Sheikh Khalifa was nominated as the Crown Prince of Abu Dhabi, and on the next day he was appointed as the Head of the Abu Dhabi Department of Defense. In that post, he oversaw the building up of the Abu Dhabi Defense Force, which after 1971 became the core of the UAE Armed Forces.
Following the establishment of the UAE in 1971, Sheikh Khalifa assumed several positions in Abu Dhabi: Prime Minister, head of the Abu Dhabi Cabinet (under his father), Minister of Defense, and Minister of Finance. After the reconstruction of the Cabinet of the United Arab Emirates, the abolishment of the Abu Dhabi Cabinet, and the establishment of the Executive Council of Abu Dhabi, he became the 2nd Deputy Prime Minister of the United Arab Emirates (23 December 1973) and the Chairman of the Executive Council of Abu Dhabi (20 January 1974), under his Father.
In May 1976, he became deputy commander of the UAE armed forces, under the President. He also became the head of the Supreme Petroleum Council in the late 1980s, and continues in this position today, which grants him wide powers in Energy matters. He was also the chairman of the Environmental Research and Wildlife Development Agency.
Seychellois government records show that since 1995 Khalifa has spent $2 million buying up more than 66 acres of land on the Seychelles' main island of Mahé, where his palace is being built. The Seychelles' government has received large aid packages from the UAE, most notably a $130 million injection that was used in social Service and military aid, which funded patrol boats for the Seychelles' antipiracy efforts. In 2008, the UAE came to the indebted Seychelles government's aid, with a $30 million injection.
Khalifa paid $500,000 for the 29.8-acre site of his palace in 2005, according to the sales document. A Seychelles planning authority initially rejected the palace's building plans, a decision overturned by President James Michel's cabinet. A month after the start of construction of the palace, the national utility company warned that the site's plans posed threats to the water supply. Joel Morgan, the Seychelles' minister of the environment, said the government did not tender the land because it wanted it to go to Khalifa. Morgan said "the letter of the law" might not have been followed in the land sale. In February 2010, the sewage system set up by Ascon, the company building the palace, for the site's construction workers overflowed, sending rivers of waste through the region, which are home to more than 8000 residents. Local government agencies and officials from Khalifa's office responded quickly to the Problem, sending in technical experts and Engineers. Government officials concluded that Ascon ignored health and building codes for their workers, and fined the company $81,000. Ascon blamed the incident on "unpredicted weather conditions". Khalifa's presidential office offered to pay $15 million to replace the water-piping system for the mountainside., and Seychelles' government representatives and residents say Ascon has offered to pay roughly $8,000 to each of the 360 households that were affected by the pollution.
In 2010, Khalifa was described in a WikiLeaks cable signed by the U.S. ambassador as a "distant and uncharismatic personage."
In Fall 2011, the Emirates initiated a program to promote "allegiance" to Khalifa and other Emirati Leaders. The program continues, and encourages not only Emirati nationals, but residents from any nationality to register their "appreciation, recognition, and loyalty" to the Emirs.
Later that year Khalifa was ranked as the world's fourth-wealthiest monarch, with a fortune estimated to be worth $15 billion. In 2013, he commissioned Azzam, the longest motor yacht ever built at 590 ft (180 m) long, with costs between $400–600 million.
In January 2014, Khalifa suffered a stroke and was reported to have been in a stable condition after undergoing an operation.