This project investigates the relationship between religion, the state, development and Religious NGOs (RNGOs) in general and Islamic NGOs in particular in Bangladesh. Based on fieldwork with three Islamic NGOs, and carried out in Bangladesh over the period of July 2010 to February 2011, this research attempts to answer five specific research questions. This research uses qualitative interviews, focus group discussions, and participant observation to collect data from beneficiaries and non-beneficiaries of Islamic NGOs (including beneficiaries of secular NGOs), NGO officials and local key informants in three districts in Bangladesh. A new form of ‘governmentality’—a pious or sacralised governmentality, as this research argues, emerged in the context of hegemonic neoliberal governmentality. This new form of governmentality is revealed through the practices and programs of the Islamic NGOs, for example, through their practice of ‘entrepreneurial Homo economicus’. Thus Islamic NGOs also changed the ideological structures shaping the lives of rural women through an Islamic version of ‘women empowerment’ and the enhancement of Muslim women’s agency. Although an Islamic ideological construct informs the programs and activities of Islamic NGOs, these NGOs are having a crisis in their Islamic identity due to their alleged connections with Islamists, war-crimes and subsequent state surveillance. Yet, this research argues that in the context of the perceived ‘coercive’ practices of secular NGOs Islamic NGOs have the potential to emerge as an alternative development practice in Bangladesh.