This paper examines the redefinition and sharpening of boundaries between Muslims and non-Muslims in South Asia over the centuries as a result of changing conceptions of religious identity. It describes the development of two conflicting attitudes among Muslims concerning the issue of being Muslim in a predominantly non-Muslim majority society, namely, a separatistic/legalistic one and an assimilationist/mystical one. The paper contends that much of the history of South Asian Muslim communities and their interactions with non-Muslims in the region may be understood within the framework of a dynamic interaction and tension between these two antagonistic attitudes. In addition, the paper discusses the impact of British colonial rule and the growth of communal nationalisms in fostering ideologies of difference between Muslim and non-Muslim in South Asia. It also considers briefly the role of variously-defined policies of Islamization and Sanskritization in culturally distancing Muslim from non-Muslim as common cultural elements, such as language, dress and music, are increasingly perceived as elements of religiously-based communalisms.‬