On 25 June 2003, the British newspaper The Daily Mirror reported that al-Sahhaf had been captured by coalition troops at a roadblock in Baghdad.[10] The report was not confirmed by military authorities and was denied by al-Sahhaf's family through Abu Dhabi TV. The next day al-Sahhaf himself recorded an interview for the Dubai-based news channel, al-Arabiya.[11] He was reportedly paid as much as $200,000 for the television interview, during which he appeared very withdrawn in contrast with the bombastic persona he projected during the war. Many of his answers consisted of a simple "yes" or "no". He refused to speculate on the causes of the downfall of the Iraqi government and answered only "history will tell" when asked if video clips purporting to prove that Saddam Hussein was alive were genuine, amid speculation at that time that Hussein had been killed during the war.

His fame quickly evaporated as the war continued into the insurgency phase; from the middle of 2003 onward, he faded from the public spotlight, and was no longer a figure in the war. Al-Sahhaf said that he had surrendered to US forces, had been interrogated by them and released.[12][13] He was not charged for his role in Saddam Hussein's government.[citation needed]

In March 2008, it was reported by the British press that Ali was living in the United Arab Emirates.[14]