When Uthman was killed in 656 CE by rebels from Egypt, Kufa and Basra, the potential candidates for caliphate were Alī ibn Abī Ṭālib and Talha. Malik al-Ashtar, the leader of the Kufis, seems to have played a key role in facilitating the caliphate of Ali. The caliphate was offered to Ali and he accepted the position after a few days.

According to Heck, Ali forbade Muslim fighters from looting and instead distributed the taxes as salaries among the warriors, in equal proportions. This might have been the first subject of the dispute between Ali and the group that later constituted the Kharijites. Since the majority of Ali's subjects were nomads and peasants, he was concerned with agriculture. In particular, he instructed his top general, Malik al-Ashtar, to pay more attention to land development than short-term taxation.