This article examines the ways in which Islamic civilization has faced the challenges of the modern age and of globalization. The expansion of Islam in world history is itself a global or proto-global process with its own distinctive internal dynamics. The main challenge to modern Islam, coming from the global political culture in the form of constitutionalism and democratization and human rights, has set in motion a civilizational encounter that has significantly altered the politico-religious dynamics of the proto-global, pre-modern Islamic pattern. The intermingling of these inter- and intra-civilizational processes is traced with respect to the subversion of constitutionalism by ideology during the 1945–1989 period, and the slow recovery of the rule of law since 1989. The same framework of civilizational analysis is used for understanding Islamic fundamentalism, and counter-global defensive developments in contemporary Islam.