A left-handed top order batsman, Khawaja was awarded Player of the Australian Under-19 Championship in 2005 and also played for Australia in the 2006 U-19 Cricket World Cup in Sri Lanka as an opening batsman.

He made his first-class debut for the New South Wales Blues in 2008. In the same year, he hit consecutive double centuries for the NSW Second XI—a feat never before achieved by a NSW player. On 22 June 2010 it was announced by Cricket Australia that Usman Khawaja would be a part of the Australian touring squad to play Pakistan in a two Test series in England.

Since 2011, Khawaja has played for the Sydney Thunder in the Big Bash League. In BBL05, he was the second highest run scorer (345 runs) and averaged 172.50 runs per match.

Khawaja signed a contract to play for county side Derbyshire in the 2011 English domestic season. He played in four County Championship matches, averaging 39.87 with the bat and scoring a century (135) against Kent. After his county stint, he made five further Test appearances in 2011, scoring one half-century (65) against South Africa. He was dropped from Australia's Test team after the home series against New Zealand, making way for Shaun Marsh upon Marsh's return from injury.

Lancashire signed Khawaja as an overseas player for the 2014 county season for all formats. Khawaja scored 86 runs on his debut against Durham but in vain as Lancashire lost by 27 runs.

He plays club cricket for Valley District Cricket Club in Brisbane.

In August 2015, Khawaja was appointed as captain of the Queensland cricket team, replacing previous captain James Hopes.

In April 2018, he was signed by Glamorgan County Cricket Club to play in the 2018 Vitality Blast tournament in England.

Khawaja was selected as part of the 17-man Australian squad for the 2010–11 Ashes series. During the third Test, Ricky Ponting fractured his finger and Khawaja was named as a stand-by if Ponting could not recover in time. He