This paper examines the relationship between politics and religion in Muslim countries. Many western and Muslim scholars argue that Islam is not only a religion but also a blueprint for social order, and therefore encompasses all domains of life, including law and the state. After examining these and related issues, the paper reports empirical evidence, which shows that institutional congurations form an important factor in mediating and articulating the nature of the relationship between religion and politics in Muslim countries. Two types of configurations—undifferentiated and differentiated—are identified. Undifferentiated institutional configurations refer to social formations in which religion and the state are integrated. In contrast, differentiated institutional configurations refer to social formations in which religion and politics—by constitutional requirement or by tradition—occupy separate spaces. The empirical evidence discussed in the paper indicates that, in general, the trust placed in religious institutions and consequently their public influence is greater in Muslim countries with differentiated institutional configurations than in those with undifferentiated ones. The paper offers some theoretical underpinnings for this and other findings, and argues that undifferentiated Muslim societies tend to take on the characteristics of differentiated societies over time.