In his early career, Terrell defeated some good contenders, including Cleveland Williams (Terrell won the rematch by decision after losing to Williams in their first fight by knockout), Zora Folley, and future Light Heavyweight champion Bob Foster. But he's best remembered for his challenge to World Heavyweight Champion Muhammad Ali, on February 6, 1967—a bout in which he was badly beaten.
Ali was scheduled to fight WBA champion Ernie Terrell (the WBA stripped Ali of his title after his agreement to fight a rematch with Liston) on March 29, but Terrell backed out and Ali won a 15-round decision against substitute opponent George Chuvalo. World Boxing Association matched Terrell and Eddie Machen for the vacant crown. Terrell defeated Machen to win the belt on March 5, 1965. He held it until February 6, 1967 when he lost to Muhammad Ali. During this time, most in the boxing world continued to recognize Ali as the legitimate champion, since he had not lost his championship in a boxing match. The WBA's rival, the World Boxing Council, had also continued to recognize Ali as champion.
During his reign as WBA Champion, Terrell defended the title twice, beating Doug Jones and George Chuvalo.
In February 1967, Ali and Terrell met to end the debate about who was the legitimate heavyweight champion. Before the bout, Terrell repeatedly called Ali by his birth name. He said later that he had known Clay for years in the amateurs and hadn't gotten used to calling him another name. Ali took offense to this, and vowed he would punish Terrell. For his part, Ali further stoked the prefight ill will by labeling Terrell "an Uncle Tom nigger who is going to get his ass whupped."
Ali won a lopsided 15-round decision, reclaiming the undisputed championship. The Daily Telegraph wrote that the resulting fight was "the nastiest display of Ali's celebrated ring career", recounting how he seized Terrell in a headlock and dragged Terrell's eye along the top rope, and declared, "The fight will be remembered for Ali's constant taunts of 'what's my name?' to an opponent he was apparently content not merely to defeat, but also to belittle and humiliate." The fight is recounted by the film Ali starring Will Smith.
Terrell lost an upset 12-round decision later in 1967 in the WBA Heavyweight Tournament which was organized after Ali was stripped of his title in April 1967. He left the sport for three years following the loss, but returned in 1970, winning seven consecutive fights before losing to Chuck Wepner by decision (the Wepner decision was highly controversial and most who saw the fight thought Terrell had won).
In 55 professional fights, Terrell earned a record of 46 wins (21 by knockout), nine losses and no draws. After retiring from boxing in 1973 following a knockout loss to Jeff Merritt, he began a career as a record producer in Chicago, in the city where he had attended Farragut Career Academy.
Terrell ran unsuccessfully for alderman of Chicago's 34th ward in 1987. He finished second in the primary but lost to Lemuel Austin in a runoff. Terrell died on December 16, 2014 in a hospital at Evergreen Park, Illinois. He had been suffering from dementia.