This article explores Islamic politics in two Muslim- majority countries in Southeast Asia, Indonesia and Malaysia, by linking their trajectories, from late colonial emergence to recent upsurge, to broad concerns of political economy, including changing social bases, capitalist transformation, state policies, and economic crises. The Indonesian and Malaysian trajectories of Islamic politics are tracked in a comparative exercise that goes beyond the case studies to suggest that much of contemporary Islamic politics cannot be explained by reference to Islam alone, but to how Islamic identities and agendas are forged in contexts of modern and profane social contestation.