The Islamic economic sector has grown rapidly in Malaysia and Islamic businesses can be found in a wide range of sectors including culinary, Islamic finance, Islamic takaful (insurance and mortgage) industries, fashion, cosmetics, pharmaceuticals, entertainment, and tourism industries. Islamic tourism, in particular, offers a new means of developing the tourism industry in Malaysia whilst maintaining the ethics, culture and values of Islam. Islamic tourism is not defined as a visit to the mosque alone, but the visit is closely related to nature, culture, or creativity that integrates with Islamic values. Currently, the concept of adherence to Islam (which has been called as Shariah-compliant) has gained traction across the globe. In response to this new lifestyle trend, many countries (including those such as Korea, Japan, Australia, Thailand, and New Zealand which do not have a domestic Muslim majority) are beginning to introduce tourism products related to the halal concept or Islamic orientation. The definition of Islamic tourism is still unclear and encompasses various terms such as Halal Tourism, Halal Friendly Travel Destinations, Halal Travel, Islamic Travel Destinations, and Halal Lifestyle. Even in Malaysia, a leader in this sector, the concept of Islamic tourism is still liminal. However it offers huge potential, both for the country’s tourism sector and the country’s Islamic population, contributing to the preservation and appreciation of Islamic culture in Malaysia. Islamic tourism is not only related to religious values but also must be in line with every way of life that is not contrary to Islam. Not many companies and agencies organize halal tourism packages because they think it is not a necessity and a profit. Many companies are more focused on routine Islamic tourism such as Umrah and Hajj. This paper considers in detail the characteristics, concept and principles of Islamic tourism.