Before joining Microsoft, Rashid was professor of computer science at Carnegie Mellon University (CMU). As a faculty member, he directed the design and implementation of several influential network operating systems and published extensively about computer vision, operating systems, network protocols and communications security. During his tenure, Rashid developed the Mach multiprocessor operating system, which has been influential in the design of modern operating systems and remains at the core of several commercial systems.

Rashid's research interests have focused on artificial intelligence, operating systems, networking and multiprocessors. He has participated in the design and implementation of the University of Rochester's Rochester Intelligent Gateway operating system, the Rochester Virtual Terminal Management System, the CMU Distributed Sensor Network Testbed, and CMU's SPICE distributed personal computing environment. He also co-developed of one of the earliest networked computer games, "Alto Trek," during the mid-1970s.