In the aftermath of 'Smiling Buddha', a surprise nuclear test conducted by India in May 1974, Munir Ahmad appointed Mahmood as the director of the enrichment division at PAEC, where the majority of calculations were conducted by Dr. Khalil Qureshi– a physical chemist. Mahmood analyzed the gaseous diffusion, gas centrifuge, jet-nozzle and molecular laser isotope separation method for uranium-enrichment; recommending the gas centrifuge method as economical. After submitting the report, Mahmood was asked to depart to the Netherlands to interview Dr. Abdul Qadeer Khan on behalf of President Bhutto in 1974. In 1975, his proposal was approved and the work on uranium enrichment started with Mahmood as its director, a move that irked the more qualified but more difficult to manage Dr. Abdul Qadeer Khan, who had coveted the job for himself. His relations with Dr. Khan remains extremely tense and the pairs disagreed with each other and developed differences at great height. In private meetings with Munir Ahmad, Mahmood often complained and pictured him as "egomaniac". In 1976, Mahmood was removed from the enrichment division, Project-706, by Abdul Qadeer Khan, and Khan moved the enrichment division at the Engineering Research Laboratories (ERL) under military control.