At a time when religion has assumed a particular potency in shaping and defining inter-community and inter-state relations the world over, the need for evolving alternate understandings of religion to creatively deal with the fact of religious pluralism has emerged as a pressing necessity. This is an issue for concerned and socially engaged believers in all religious traditions. This paper deals with how, contrary to widely-head stereotypical notions, Islam can be interpreted to promote inter-faith dialogue and amity between followers of different faiths. This discussion centers on the work of a noted Indian Muslim scholar-activist, Asghar ‘Ali Engineer, seeing how he deals with the primary sources of Islam in order to develop an Islamic theology of pluralism and social justice. Given the fact that in many parts of the world today conflicts involve Muslims and people of other faiths, Engineer’s creative approach to the Qur’an offers us an alternate way of imagining Islam and Islamic rules for relations between Muslims and others. In turn, this way of approaching Islam, fashioning Islam as an instrument of peace instead of a tool for war and bloodshed, can provide insights and inspiration to work towards the peaceful resolution of many conflicts in which Muslims are involved.