The walled town, Khuldabad alias Rauza (literally means 'Heavenly Abode'), situated 5km from Ellora caves and 22 km from Aurangabad is the holy shrine of Deccan Muslims. Also known as Karbala town, it houses the tomb of Emperor Aurangazeb which was built according to his wish and is always decorated by flower petals. It is an important religious center due to its abode to two of the most revered Muhammaden saints namely, Burhan-ud-din and Zain-ud-din and also the dargah of Moinuddin Chishti, the spiritual guide of Aurangzeb.

Khuldabad consists of 7 gates namely Nagarkhana, Pangra, Langda, Mangalpeth, Kunbi Ali, Hamdadi and Azam Shahi. Other added attractions are the Mughal garden called Bani Begum Ka Bagh , the figure of Hanuman in sleeping position, tombs of Azam Shah and his wife. A huge tank lies to the west of the city wall which could have been a major water source for the city. Annual Khuldabad Urs is held here in the month of May to may homage to the saints.