This article delineates the changes of Islamic higher education institution (university) in Indonesia whose explore use of several terms that signify Islam and education, and provides guidelines to clarify their use in educational concept discourses. Building on this, the article describes a typology of Islamic education and its associated institutions. Influences of globalization in terms of economics and technology are also discussed in this article. This enhances understanding of important conceptual differences that hinge upon subtle variations of language as in the distinction between education of Muslims and for\ Muslims, and between teaching Islam and teaching about Islam. The article then seeks to elucidate a theoretical conception of "Islamic education," that takes into consideration the Islamic Holy Book Al Qur’an and Prophetic statements, along with commonly-held approaches to education in Muslim history especially in Indonesia. The article concludes that key motivations and characteristics of a holistic and purposeful education program are shared between Islamic traditional education (in pesantren) and Western traditions or modern education until the present. The article also discusses on a dichotomy between sciences and Islamic subjects that have to be delivered both in public universities and education institution based-Islam. The discourse is being a very long discussion in Indonesia until today.