Islamic revivalism that started in the late 1970s has transformed the socio-political landscape of Muslim-majority countries all over the world. Islamic symbols permeate every nook and cranny of the society as more people look to the faith for succor and guidance. Many also see Islam as the solution to all the ills faced by the society; hence, the upsurge in Islamically-oriented social movements at this time. The state’s responses ranged from harsh retaliation to co-opting the language and norms of the Islamic opposition. Islamic education becomes one of the highly contested arenas where the the state and various Islamic groups jockey for the rights to religious interpretive hegemony as a means to dominate the discourse and shape the minds of the society in general. My question is why some states decide to adopt different approaches during this period to manage and control the Islamic education system in their country. I am using Indonesia and Malaysia as my case studies to illustrate these policy variations.