He features on India's most wanted list of 20 people it accuses of terrorism.
The group he leads, Jaish-e-Mohammad, is accused of a string of deadly attacks on Indian targets, including one on parliament in Delhi in December 2001.
Maulana Azhar was detained for a year by authorities in Pakistan in connection with that attack, but never formally charged.
The Lahore High Court ordered an end to his house arrest on 14 December 2002.
Three years earlier, he was freed from an Indian prison in exchange for passengers on a hijacked Indian Airlines jet.
His brother, Ibrahim, is thought to have been one of the hijackers.
Kidnapped tourists
Maulana Azhar set up Jaish-e-Mohammad in early 2000, shortly after being set free by India.
Until then he had denied belonging to any group and his family maintained he was a religious scholar.
India arrested him in 1994, and accused him of being a member of the Harkat-ul Mujahideen, one of the leading militant groups in Kashmir.
In 1995 a group, which kidnapped six Western tourists, also called for his release.
One of the hostages, a Norwegian was killed, one escaped and the remainder are missing but feared dead.
The tourists were trekking in Kashmir's Pahalgam district when they were captured.
Editor
Indian security officials say Maulana Masood Azhar comes from a rich land-owning family in Pakistan.
He was born in 1968 in Bahawalpur, in the central Pakistani province of Punjab.
He received his Islamic education at Jamia Uloom-i-Islami, near Karachi, which has a reputation as one of Pakistan's leading religious universities.
After completing his education, he became a teacher at the institute for several years, a former colleague told the AFP news agency.
He went on to write several Islamic books and became editor of a religious magazine.
His family say that when he was arrested he was in India working for the magazine.