The impetus for this research comes from the ongoing community debate over the increasing number of Islamic schools being established in order to meet the needs of Australia's growing Muslim population. The thesis traces the history and development of Islamic schools in Australia in the last thirty years. It acknowledges some of the early difficulties that they faced but then seeks to explore the apparent contradiction between the growing demand for the schools and increased public opposition, in particular since the events of September 2001. In Australia this took the form of growing Islamophobia accentuated by the Australian values debate after 2003, and the portrayal of the Muslim community by the media as a monolithic entity tainted by radicalised militant Islam. The research carried out over several years, starting in 2004, seeks to fill a gap in the limited literature on the subject to date. While there has been growing research on what Muslims think about life in Australia and how the wider community perceives Islam, there has been very little work done on the Islamic schools which are currently attended by about 20% of young Muslims in Australia. This thesis is constructed around three central questions posed to staff and former students at the schools. The first looks at what is taught in the faith units and who teaches these subjects. Linked to this is the question of the extent to which an Islamic ethos pervades the 'hidden curriculum', that is the other subjects taught in the curriculum and the daily rhythm of school life. The second question considers the impact of the Australian values debate and whether staff and students agree with the charge that Muslim values are different from Australian values. This question also takes into account the frequently made accusation that the schools teach intolerance of other faiths as a central tenet of Islam. Finally the thesis seeks to respond to the allegation that the schools form ghettos that isolate the students from mainstream Australian society and thus function as agents of exclusion.