Contemporary global events, such as the wars in Iraq and Afghanistan, the unresolved conflict in the Middle East, and the pessimistic relationships with Muslim countries, pose challenges for Muslims living in the United States in all walks of life. In addition, Muslims encounter daily struggles to live within a society that follows considerably dissimilar beliefs, norms, and way of life. Therefore, Islamic schools and other organizations emerged in response to those challenges. There are several debates in the literature about Islamic schools; among those debates is whether Islamic schools segregate Muslim students, inspire religious intolerance, and rejection of social pluralism's ideals. In addition, there are debates of whether Islamic schools are capable of developing a strong Muslim identity skilled to tackle future challenges. Discussing these debates is considered the first step to critically tackling the challenges meeting Islamic schools, their relevance, and their continuity in a way that benefits Muslim generations and the American society. Furthermore, such debates draw attention to the impediments facing the success of these schools and the possible strategies to resolve problematic issues. This article explores each of these debates in detail.