The purpose of this research is to study the acceptance of the community in Terengganu towards Islamic banking. The findings revealed that majority of customers have a lack of knowledge and information about Islamic banking. They do not understand the principles of Syariah which were applied in product/services such as Bai’ Bithaman Ajil, Ijarah and Murabahah. Publication: 4th International Malaysian Studies Conference; 3-5 August 2004, Universiti Kebangsaan Malaysia, Bangi. Authors: Zuraini Anang, Roshanim Koris & Roseliza Mat Alipiah.