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On 1 December 1976 then government announced the establishment of the Islamic University to promote a coordinated approach to Islamic education and general education in the country. Islamic University, Kushtia was founded on 22 November 1979 at Shantidanga-Dulalpur (Kushtia-Jhenidah) by then President of Bangladesh General Ziaur Rahman, based on the recommendation of ‘Islamic University Planning Committee’ on 7 January 1977 headed by M. A. Bari including seven other members.

The objective of establishing Islamic University is "to provide for instruction in theology and other fields of Islamic Studies and comparative jurisprudence and such other branches of learning at Graduate and Postgraduate level as the University may think fit and make provision for research including Post-Doctorate research and training for the advancement and dissemination of knowledge"[9] On 1 January 1981 the government of Bangladesh appointed A. N. M Momtaz Uddin Choudhury as the first vice-chancellor and the university became operational that year.

As construction of several important buildings began, a presidential decree was issued on 15 May 1982 to shift the university from Shantidanga-Dulalpur (Kushtia-Jhenaidah) to Boardbazar, Gazipur on an area of 50 acres. The construction of an academic building, two residential halls and other necessary infrastructures were completed. Initially two faculties (Faculty of Theology and Islamic Studies, Faculty of Humanities and Social Sciences) with four departments (Al-Quran and Islamic Studies, Dawah and Islamic Studies, Accounting and Information System, Management) were established and 300 students were enrolled in the session of 1985–86. Dept. Created Year Dept Abbreviated name of Depterment 1986-90 06 AQIS, DIS, AIS, MGT, LAW, ECO 1991-95 06+9 Bangla, ELL, ALL, IHC, PA, AHIS, CSE, EEE, ACCE 1996-00 15+3 ICT, BTGE, ANFT 2001-05 2006-10 18+4 MATH, AFLS, FAB, STATS 2011-15 22+3 FS, PA, MKT 2016-20 25+9 BME, PHAR, GE, LLM, HRM, THM, DS, SW, FA 2021-25 34+2 MCJ, PESS In 1987, two more departments (Economics, Law) were established. On 28 December 1988, while the infrastructure development and academic activities were in full swing, the university was again shifted to Shantidanga-Dulalpur (Kushtia-Jhenidah). In 1991 five more departments — Bengali, English, Arabic, Islamic History, and Public Administration — were established. In 1992, one more departments (Al Hadith and Islamic Studies) were established.

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