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This article examines how European state authorities are taking part in the shaping of Islam in Europe by comparing the impact of German and Dutch state policies on Islamic organisations such as Milli Görüş, a Turkish-origin political Islamic organisation. Milli Görüş in the Netherlands has cooperated with Dutch authorities and developed liberal Islamic interpretations, while German authorities list Milli Görüş among the top threats to the constitution. The difference between German and Dutch Milli Görüş has been created through the partially-exclusivist policies of Germany and the multicultural policies of the Netherlands. I suggest that, on the one hand, the Dutch socio-political system and multicultural policies actively promote public recognition of the Muslim community, provide for a transparent relationship between the state and Islamic organisations and make cooperation a more rewarding strategy for Islamic organisations to attain their goals. On the other hand, the German socio-political system and partiallyexclusivist policies provide limited venues for participation and recognition, promote distrust between political authority and Islamic organisations, and make court cases a more rewarding strategy for public recognition. This comparison may provide insights for European states on how to develop policies conducive to Muslim incorporation.