In July 1820, Muhammad 'Ali, viceroy of Egypt under the Ottoman Turks, sent an army under his son Isma'il to conquer the Sudan. Muhammad 'Ali was interested in the gold and slaves that the Sudan could provide and wished to control the vast hinterland south of Egypt. By 1821 the Funj and the sultan of Darfur had surrendered to his forces, and the Nilotic Sudan from Nubia to the Ethiopian foothills and from the 'Atbarah River to Darfur became part of his expanding empire.

The collection of taxes under Muhammad 'Ali's regime amounted to virtual confiscation of gold, livestock, and slaves, and opposition to his rule became intense, eventually erupting into rebellion and the murder of Isma'il and his bodyguard. But the rebels lacked leadership and coordination, and their revolt was brutally suppressed. A sullen hostility in the Sudanese was met by continued repression until the appointment of 'Ali Khurshid Agha as governor-general in 1826. His administration marked a new era in Egyptian-Sudanese relations. He reduced taxes and consulted the Sudanese through the respected Sudanese leader 'Abd al-Qadir wad az-Zayn. Letters of amnesty were granted to fugitives. A more equitable system of taxation was implemented, and the support of the powerful class of holy men and sheikhs (tribal chiefs) for the administration was obtained by exempting them from taxation. But 'Ali Khurshid was not content merely to restore the Sudan to its previous condition. Under his initiative trade routes were protected and expanded, Khartoum was developed as the administrative capital, and a host of agricultural and technical improvements were undertaken. When he retired to Cairo in 1838, Khurshid left a prosperous and contented country behind him.