Given the increasing prevalence of Islam, current socio-political climate and visibility of Muslim women in Western societies the current study aimed to investigate 1) the nature of religious discrimination experienced by Muslim women in New Zealand and 2) the influence of perceived religious discrimination and differing facets of Islamic identity (psychological, behavioural and visible) on the psychological wellbeing (life satisfaction and psychological symptoms) of 153 Muslim women. The results of the present study revealed that Muslim women rarely feel discriminated against, although women originating from the Middle East and Africa reported significantly more discrimination than women from Asia. When discrimination did occur, it was more likely to come from strangers and service people and take the form of social exclusion as opposed to direct harassment. Furthermore, Muslim women wearing highly visible hijab experienced significantly more religious discrimination.A strong sense of Islamic identity (psychological, behavioural and visible) and low frequency of perceived religious discrimination were hypothesized to predict significantly greater life satisfaction and fewer psychological symptoms in Muslim women. Contrary to the hypothesis, psychological and behavioural facets of Islamic identity, in addition to perceived religious discrimination, failed to independently predict psychological wellbeing.Islamic visibility did however predict greater psychological wellbeing. Strong endorsement of the different aspects of Islamic identity was hypothesized to buffer the detrimental influence of perceived religious discrimination on psychological wellbeing. The results of the present study however indicated strong psychological affiliation with Islam may have exacerbated the detrimental effect of perceived religious discrimination and as a consequence was associated with poorer psychological wellbeing. The act of participating iii in Islamic practices, on the other hand, seemed to provide a degree of resistance against the detrimental effects of religious discrimination and was associated with better psychological wellbeing.iv