Khanna had a string of box office flops, including Aaina and Mehbooba. Media reports in the late seventies suggested that success had perhaps caused Khanna to be complacent, often turning up late for shoots and throwing tantrums, as well as having a whole entourage of sycophants accompany him for his shoots. This behaviour coupled with the changing trend from romantic and social movies to action oriented multi-star films in the late-1970s and early-1980s caused the decline of Khanna's career in terms of box office ratings to some extent. However, he continued basically in solo hero social sober household meaningful films during multistar masala films' era.
Khanna met with more success in challenging roles with critically acclaimed box office hits such as,Amardeep,Thodi Si Bewafai, Dard, 'Dhanwaan' 'Avtaar' 'Agar Tum Na Hote, Souten[Red Rose]etc. (1979 onwards). He also performed in few Multistar films with Central Characters such as Kudrat, Rajpoot, Dharam Aur Kanoon, Ashanti, etc.
He shared a very close relationship with R.D.Burman and Kishore Kumar. The trio, who had a great working relationship, were very close friends and have worked together in more than thirty films. Several actors who were part of the cast of most of his films included Sujith Kumar, Prem Chopra,Madan Puri, Asrani, Bindu, Vijay Arora and A K Hangal, who remained part of his "team" until the late eighties.
From the early nineties onwards he stopped acting and served as an M.P. of New Delhi Constituencyfrom 1991 to 1996.During that period, he returned to acting, appearing in Khudai (1994). He made a come back as a NRI in Aa Ab Laut Chalen (1999), and Kyaa Dil Ne Kahaa (2002). In September 2007, he officially announced his planned return to the big screen, signing a contract for several new films, including some T.V. serials. His one of the mega TV serials Raghukul Reet Sada Chali Aai is on air since November, 2008.
Rajesh Khanna is now the life member of International Film And Television Club and International Film & Television Research Center of Asian Academy Of Film & Television.