Modern theory of religious pluralism, which emerged initially in the thoughts of liberal Christian theologians, becomes more important after world wide recognition of diversities of cultures, belief systems, and standards of morality. The pluralistic quality of truth affirms that truth is always relational. Among the contemporary Muslims there are those who, on the base of Islamic theology, are also thinking that Islam is not the only way of salvation. Muslims can go to paradise by following Islam; the adherent of other faiths may also attain God’s grace by following their own faith. Unity of essence, in faiths is the base of religious pluralism. Al-Qur’ān is also inviting toward ‘unity of faith’ where wisdom and fair dialogue bring together the communities of different religions and cultures into a harmony of faith and purpose. Exclusivisim, inclusivism, parallelism and pluralism are dialogical attitudes but pluralism is most appropriate for dialogue. Sound basis of religious Pluralism is found in Islamic theology. It believes that submission to God in the light of divine guidance is the core of the massages of all the prophets and messengers. All prophets were Muslims (submitters to God), and Islam is not merely the religion preached by Muhammad but was also the religion of all the true prophets of God such as Noah, Abraham, Jacob, Joseph, Moses, and Jesus and their followers. Muslim recognition of legitimate religions is not limited to Christianity and Judaism only, but it extends to almost al major pre-Islamic religions including Hinduism and Buddhism. Religious pluralism in Islam is based on the acknowledgement of the non-believer on three distinct levels: The first is that of humanism. Its second level is ‘universalism of revelation’. The third level of religious pluralism in Islam is its identification with historical revelation of Judaism and Christianity. The Freedom of choice of faith is the ultimate result and thus aftermath of the religious pluralism. Islam also considers it as the basic ingredient of conversion because conversion by force, coercion or interference is null and void. It is need of time that scholars of Islamic Studies should work hard for exploring the further pluralistic dimensions of Islam.