He became a Muslim in 1977 after his brother had given him a copy of the Quraan to read.
It was from there, that he had changed his name and had promised to release one more album with his old time producer Paul Samwell-Smith called, Back To Earth.
Upon retiring, he felt that it was not right to live in a life of luxury, and he was helping in humanitarian and charitable causes. He also gained government funding for under-privileged Muslim schools in Britain. Yusuf now annually donates over half his income to charity.

His 1972 album Catch Bull at Four spent three weeks at number one on the Billboard 200, and fifteen weeks at number one in the Australian ARIA Charts. He earned two ASCAP songwriting awards in 2005 and 2006 for The First Cut Is the Deepest, and the song has been a hit for four different artists.[8] His other hit songs include Father and Son, Wild World, Peace Train, Moonshadow, and Morning Has Broken. In 2007 he received the British Academy's Ivor Novello Award for Outstanding Song Collection.

In December 1977, Stevens converted to Islam and adopted the name Yusuf Islam the following year. In 1979, he auctioned all his guitars for charity and left his music career to devote himself to educational and philanthropic causes in the Muslim community. He was embroiled in a long-running controversy regarding comments he made in 1989 about the death fatwa on author Salman Rushdie. He has received two honorary doctorates and awards for promoting peace from two organizations founded by Mikhail Gorbachev.

In 1995, Yusuf Islam (after the silence of eighteen years) released another release The Life Of The Last Prophet on his own label: Mountain Of Light followed by A For Allah in 2000.

In 2006, he returned to pop music – releasing his first album of new pop songs in 28 years, titled An Other Cup. With that release and for subsequent ones, he dropped the surname Islam from the album cover art – using the stage name Yusuf as a mononym. In 2009, he released the album Roadsinger, and in 2014, he released the album Tell 'Em I'm Gone, and began his first US tour since 1978.He was inducted into the Rock and Roll Hall of Fame in 2014. In October 2014, he launched his book entitled Why I Still Carry A Guitar.