Islam in Indonesian and Malay world is very much heterogenuous. Taking Islam Liberal, Islam Hadhari, and Islam Progresif as the subject of analysis, this article deals with the concepts Islam Liberal, Islam Hadhari, and Islam Progresif as products of the trends in Islamic thinking, the impact of these three interpretations of Islam in Malaysia and Indonesia, the similarities and dissimilarities between the three, and their future prospects in the region. It argues that the prominence of the debates surrounding the three currents of Islamic thought is the result of struggles for power and authority in Islamic discourse in the region. It further argues that the Indonesian-based Islam Liberal differs from the Malaysian-based Islam Hadhari in that it does not originate from government sources. Islam Progresif is more of an umbrella term referring to various strands of thought developed by Muslims opposed to the status quo. Although Islam Hadhari is a newly-coined term, it contains many elements in common with other schools of Islamic thought including Islam Liberal and neo-modernist Islam.