The article argues that to better understand the shari‘a court system in Israel, these courts should be examined from a postcolonial perspective. The resemblance between Islamic law, as applied in Israeli shari‘a courts, and “customary” laws, which were applied by “indigenous” courts in diverse colonial settings, is discussed, and the similarities and differences are highlighted. Specifically, the article illustrates that the shari‘a courts in Israel—like other “indigenous” courts working in colonial settings—constitute, at one and the same time, sites of co-optation and of resistance. On the one hand, the shari‘a courts are state courts—governed and controlled by state institutions—and as such they are used by state authorities for the purpose of controlling and subjugating the Muslim minority in Israel; on the other hand, these courts also constitute a sociolegal space where Israeli Muslims may forge their identity and may negotiate their position toward the state. In other words, they constitute an arena of autonomous agency. This argument, which draws on the postcolonial literature, is illustrated in the article with empirical examples from the shari‘a courts in Beersheba and Jerusalem.