Badavi started his career at Foolad FC, however on his return from China after the 2004 Asian Cup , his troubles continued with Foolad FC and eventually left for city rival Esteghlal Ahvaz where he has yet to win a regular spot in the team. Ali Badavi continued his excellent run for Esteghlal Ahvaz in the Iran Premier League (2005-2006) Season. His form was good enough for yet another recall for international duty.

He also played for the Iranian Olympic team during the 2002 Asian Games in Busan, and soon after became a player who was regularly called up to the national team.
During Iran's Asian Cup 2004 game versus Oman, Badavi and Rezaei began physically fighting with each other in the middle of the game after a series of mistakes. Badavi was suspended for 2 games and returned in the semis versus China, where his last minute, close-range miss proved to be costly. The following season he did not have good form and is rarely called up to the national team any more.