There is no more debated issue in contemporary Islamic thought than that over the possibility of establishing a civil Islamic state or an Islamic democracy that combines Islamic values of justice, equality, religious freedom, and humanism, with modern universal political values based on democracy, rationality, the social contract, individualism, and citizenship. Going back to the foundations of modern Islamic thought’s acceptance of the modern system of democracy, it appears that there are two main currents to this thought: one that seeks a compromise between the values of western political modernity and Islamic principles by giving the system of government an Islamic specificity, and another that holds that Islam is a world religion that encompasses the totality of human affairs and that does not fear the search for common grounds with the modern concept of the civil state. This study takes a methodological approach to these two currents to analyze the foundations and principles of each, the problematic issues that arise from each vision, and the challenges they face. The author offers an evaluation of both trends and a look to the future of the “system of government in Islam” in response to the major political movement of today after a decades-long dormancy.