The Muslim convert claimed he was a conscientious objector and insisted the Quran said he could not "take part in Christian wars or wars of any unbelievers".
The fierce advocate of black pride also angered white America by saying: "I ain't got no quarrel with them Vietcong. No Vietcong ever called me n***er".
Ali, who converted to Islam in 1964 and changed his name from Cassius Clay, had also that year been ruled out of conscription after failing military aptitude tests despite his famous quick-witted eloquence.
But, in 1967, with the Vietnam War going badly and America needing more troops, the U.S. Army changed its requirements and deemed Ali eligible for service.
At his scheduled military induction in Houston on April 28, he refused four times to step forward at the call of his name and was arrested and charged with draft evasion.
The following day, many boxing organisations stripped him of his world heavyweight title three years and three months after he won it by defeating Sonny Liston.
Furthermore, the man who would earn the nickname The Greatest was banned from the ring in all 50 U.S. states and had his passport seized, he could not fight abroad.
Two months later he was tried by the Army, fined $10,000 and sentences him to five years in prison – although remained free pending several appeals.
A British Pathé newsreel, which also still insisted on calling him Clay and "Cass the Gas", showed him outside a federal court in Houston following the short hearing.
Afterwards, Ali said: "My enemy is the white people, not the Viet Cong.
"You're my opposer when I want freedom. You're my opposer when I want justice. You're my opposer when I want equality.
"You won't even stand up for me in America because of my religious beliefs, and you want me to go somewhere and fight, when you won't even stand up for my religious beliefs at home."
Ali had long battled against racism – and, unlike earlier black champion Joe Louis, who volunteered for the Army during World War II, he refused to stay quiet.
Shortly after winning boxing gold at the 1960 Olympics, he claimed he threw his medal into the Ohio River when he was rejected from a whites-only restaurant.
But the swift and agile fighter became even more politically defiant when he joined the black-supremacist Nation of Islam movement in 1964.
From then on, he made a habit of humiliating fellow black opponents he deemed to be "white man’s champions".
A notably ugly fight took place in 1967 against Ernie Terrell, who insisted on calling Ali, the descendent of a white plantation owner and black slave girl, Cassius Clay.
Ali stretched the bout out to 15 rounds, inflicted the maximum amount of pain and between punches repeatedly shouted: "What’s my name, Uncle Tom?"
He increasingly identified himself with the first African American heavyweight champion Jack Johnson, who was jailed in 1920 on trumped up charges amid public anger about his black pride, swagger and relationships with white women.
His rage and bitterness only increased after he was stripped of a title he had successfully defended 10 times.
Ali, who had previously announced "black is best", went even further in December 1967 when he called for "total racial separation" and "black homelands".
Yet by 1969, despite declaring "white people are the devil" in an interview with Sir David Frost, sympathy for his plight rose as opposition to the Vietnam War increased.
A 1971 Supreme Court ruling gave him the right to fight again and he went on to win the world championship two more times.
Ali's views also changed - he moved away from separatism and towards integration, and quit the Nation of Islam and formally became a Sunni Muslim in 1975.
The boxer, who is now 72, was given another Olympic gold medal at the 1996 Atlanta Games to replace the one he claims to have lost.
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