After graduating in 1953, Tunku Mahmud travelled to the Isle of Wight in the United Kingdom, where he enrolled into the Upper Chine School for three years. Upon completing his studies, Tunku Mahmud returned to Malaysia in 1956 and briefly served as a cadet officer in the Johor Civil Service, taking charge of affairs in District Affairs, Land and Treasury departments until his appointment as the Tunku Mahkota of Johor in May 1959.
In 1956, Tunku Mahmud married Josephine Trevorrow, from Cornwall, United Kingdom.
The marriage ended with divorce in 1962.
He remarried in 1961 to Tengku Zanariah, who came from the Kelantan royal family. Tengku Zanariah had six children with the Sultan.
Tunku Mahmud was appointed the Tunku Mahkota of Johor from 1959 to 1961, and Raja Muda from 1966 to 1981, by Sultan Ismail.
On 29 April 1981, he was re-appointed as the Tunku Mahkota shortly before his father's death.
Sultan Ismail conferring Dato' Setia Ismail Johor (SSIJ) on his son, Tunku Iskandar in October 1975.
He succeeded his father, Sultan Ismail, to become the 24th Sultan of Johor upon the former's death in 1981.
He was the eighth Yang di-Pertuan Agong of Malaysia, from 26 April 1984 to 25 April 1989.
Sultan Iskandar's reign lasted for almost 29 years until his death in January 2010, upon which he was succeeded by his eĺdest son, Tunku Ibrahim.