© © 2010 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. With a Muslim population of 130 million, Bangladesh is the third largest Muslimmajority country and has the fourth largest Muslim population in the world; yet, it has retained a fairly tolerant and secular character for most of her history. Although there have been occasional drifts towards religious extremism, the secular character has never been threatened seriously. The newly independent Bangladesh in 1971 incorporated secularism as one of the four principles on which the constitution of Bangladesh was based. When Sheikh Mujibur Rahman, the founding leader of Bangladesh, and his regime were removed in a military coup in 1975 (less than four years after the country’s independence), the new military government of General Zia which took control after months of instability removed both the principles of socialism and secularism from the constitution. The military government in Bangladesh sought to introduce not only a neo-liberal economic policy, but also introduced Islam into the body politic, thus shaping the political process. The military regime brought religion to the national politics to win the support of the religious right. Bangladesh politics continues to be embroiled over the secularism/religion divide. What role does the modern state play in resolving the apparent conflict between religious and secular ideologies, especially when the state itself has been de-secularized? Does broader socio-economic progress limit or enable the state’s role as an adjudicator? This chapter will explore both the complex processes of global and local/national politics in exploring this transformation and continued tension.