This thesis examines the different roles that Islam plays in Malaysian and Indonesian - politics. Whereas Islam serves to identify and distinguish Malays from the other ethnic groups in Malaysia, Indonesian Islam reinforces a centre-periphery or Java-Outer Islands dichotomy. Islam's importance in Indonesia derives from the fact that approximately ninety percent of the country's population is Muslim, albeit many of them are not zealous practitioners. In Malaysia, on the other hand, Islam is important because it is used as a barometer to identify ethnic Malays who comprise approximately fifty-five percent of the population. Apart from being the ethnic majority, Malays wield most of the political power in Malaysia. Additionally, Islam is the official religion in Malaysia. Public policy responses toward Islam in both countries are substantially different. Indonesian public policy, which derives its precedent from Dutch colonial administration, only tolerates Islam as a private religion. Malays i an public policy toward Islam is at once supportive and suppressive. The government has to promote it as the country's official religion and outbid an Islamic political party. Also, the government has to direct Islamic revivalism so that the country's delicate inter-religious and inter-ethnic harmony is maintained. / Thesis / Master of Arts (MA)