While heading a detachment carrying booty from Delhi in March the same year, he was deprived of a large part of it by Ala Singh, founder of the Patiala dynasty, and other Sikh sardars at Sanaur and Malerkotla. In May 1757, Taimur was appointed viceroy of the Punjab by his father with Jahan Khan, the commander-in-chief, as his guardian and deputy. After the departure of Ahmad Shah Durrani, Taimur and Jahan Khan directed their attention towards chastising the Sikhs who had not been fully subdued. Their stronghold at Amritsar, Ram Rauni, was attacked and razed to the ground, the sacred tank was filled up and the Harimandar and other places of worship were defiled. The Sikhs angered by the sacrilege, ravaged the whole country around Lahore. Taimur engaged them on several occasions but was worsted each time. After a year's stay in the Punjab, he was eventually driven out by the combined forces of the Sikhs, the Marathas and Adina Beg Khan in April 1758.

Taimur became the ruler of Afghanistan in 1773 after the death of his father, Ahmad Shah Durrani. He shifted his capital from Qandahar to Kabul. The possessions of the Sikhs extended at this time from Saharanpur in the east to Attock in the west, and from Multan and Sindh in the south, to Kangra, Jammu and Bhimbar in the north. Taimur Shah made several attempts to recover his lost territories and consolidate his empire, but all he could do was to hold on to Kashmir and eject the Bhangi sardars from Multan.

Taimur Shah died in Kabul on 18 May 1793.