He is one of only five living Grand Ayat Allahs, and the most senior Shia cleric in Iraq today.
Born into a religious family, al-Sistani's grandfather held the notable position of Shaikh al-Islam (a scholar of Islam) in the province of Sistan, Iran.
At the age of five, al-Sistani began studying the Quran, and continued his education when he moved to the Iranian city of Qom in 1951. One year later, he moved to the Iraqi holy city of Najaf.
There he studied with some of the leading clerics of his time, including Imam Abul Qassim al-Khoei (who would later become one of Iraq's Grand Ayat Allahs, a predecessor to al-Sistani).
What is an Ayat Allah?
Ayat Allah means sign of God.
It is a relatively modern title that does not correspond to any specific religious function.
An Ayat Allah will have studied at the highest level and has the authority to make religious decrees.
The Ayat Allahs deputise in the absence of the 12th imam. According to Shia theology, the 12th imam is the last in a line of infallable imams since Ali, the founder of Shia theology and cousin and son-in-law of the Prophet Muhammad. The 12th imam has gone into occultation (is hidden) but will one day return.
The Ayat Allahs are believed to act as representatives of God.
A fellow student was Ayat Allah Ruh Allah Khumaini, who went on to lead the Iranian Islamic revolution.
Al-Sistani taught at al-Hawza, a network of colleges devoted to developing Shia theology, and wrote many books on Islamic jurisprudence.
Gaining the title of Ayat Allah he adopted the teachings of the "quietist tradition" - a Shia position which holds that clerics should avoid involvement in day-to-day affairs and instead serve as an authority independent of politics.
In 1992, with the assassination of al-Khoei, al-Sistani was selected by his peers to head the Hawza in Najaf.
However, some Shia factions have criticised the elderly cleric, who held an uneasy stalemate with Saddam Hussein, for staying out of politics.
After the Iraqi government fell, armed resistance continued, but the majority of Shia refused to participate as al-Sistani urged his followers not to take up arms or to embroil themselves in sectarian acts against Sunnis.
The Coalition Provisional Authority (CPA), aware of his power and influence, repeatedly praised him for his "moderation".
However, he has decided not to meet CPA administrator Paul Bremer, for fear of playing into his rivals' hands, including Muqtada al-Sadr, who has continuously criticised him for his "pro-American" stance.
But in the last few months, al-Sistani has grown increasingly critical of the coalition's plans.
He vigorously rejected the Iraqi Governing Council's (IGC) original proposal to allow for the transfer of power to an interim government, which would not be elected by Iraqis but appointed by a transitional council comprised of IGC-appointed representatives from across the country.
Earlier this year, followers of al-Sistani organised one of the largest demonstrations seen in Iraq since the start of the occupation, calling on the Americans to allow for open elections.
With the signing of the interim Iraqi constitution in March, al-Sistani has still criticised parts of the text and contends that the proposed process for elections does not give Iraqis enough of a say in shaping the political process and that it lacks sufficient safeguards for ensuring the Islamic identity of Iraq.
Remaining out of view due to fears over his safety, al-Sistani has escaped assassination attempts since the downfall of Saddam Hussein unlike some other leading Shia clerics.