Bahadur Shah faced numerous problems during his reign. The Mughal Empire was in shreds by the time Bahadur Shah had assumed control. He tried to keep peace with the Hindus, but the limitations of his realm, and the realities of the situation, made it almost impossible to rule. He had to face trouble in Rajputana as the Sikhs had risen under Guru Gobind Singh, their tenth and last guru. The Guru was however killed and his political heir, Banda Bahadur led a popular uprising against Bahadur Shah. This uprising led to the loss of Punjab, leaving Banda Bahadur as the virtual ruler of Sikhs in Punjab.

Bahadur Shah was mild and generous, but a weak ruler. Thus it was beyond his ability to hold the empire together. After a brief reign of less than five years, Bahadur Shah died in February 1712 at Lahore, while engaged in the task of improving and making alterations to the Shalimar Gardens. He was later buried at Delhi. He left behind four sons, three of whom were killed in the bloody war of succession, with the sole survivor, Jahandar Shah, who ascended the throne.