Khyal Mohammad belongs to the Afridi tribe of Pushtuns. He was born in Peshawar in 1946 to a musical family. His brother Saif Ul-Maluk was a popular singer in the 1960s, who often performed on Radio Peshawar. Saif introduced him to the radio station, where he first performed in 1958 at age of thirteen. However, for the next ten years he mainly restricted himself to playing instruments such as the tabla and harmonium. In the late 1960s he began singing and recording ghazals, traditional Pashto poems, a daring gamble since the music scene at that time was dominated by folk music. His style soon became popular in Peshawar and the NWFP.
After establishing his name on the local radio, in 1973–74 Khyal Mohammad appeared in his first movie, Dara-i-Khyber, one of the first "Pollywood" Pashto movies. This gave his career a kick-start, and since then he has appeared in many other movies. As his popularity continued to grow, he often toured in Afghanistan, Europe, the UAR and the USA. Over the years he has recorded a volume of music, and has also appeared as a playback singer in many movies, winning many awards. He has been called the Elvis Presley of Pashto music.
Khyal Muhammad renders ghazal songs in a traditional manner, choosing pieces that combine mysticism, romance and philosophy, usually with an undertone of melancholy. His voice has impressive range, but is always fully under control. Radio, television and movie producers have paid tribute to his professionalism and ability to produce flawless performances with minimal rehearsal. Zahoor Khan Zaiby, a Pakhtoon composer of Balochi and Sindhi tunes, says "Lala is an expert at harnessing the mood of the moment and the poetry through his voice. The songs from his films are considered Pashto anthems." One Of his Album is Named as "Sawee Daghuna"
In 1991, Khyal was given the National Film Award for playback singer. Khyal Muhammad has received a Pride of Performance presidential award, two National Awards and a gold medal from Pakistan Television Corporation presented by Madame Noor Jehan. In April 2009, Chief Minister Ameer Haider Khan Hoti presented a cheque for Rs one million to Khyal Muhammad on behalf of the provincial government for his services to Pushto music and ghazals.
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- 6th national film award ceremony at Islamabad on 21st December, 1991. National Film Development Corp. p. 78. OCLC 31605422.
- "Hoti gives Rs 1m award to Pushto singer". The News International. 27 April 2009. Retrieved 2009-08-29.[dead link]