It is possible to argue that there is a European identity which makes Europeans different from the rest and owned with the national identities concomitantly. As a concept devoid of a consensual definition, European identity has become a dynamic entity in the historical context by transforming itself with the newly emerging conditions. Apart from the shared commonalities, differences from the others also played a vital role in the emergence of European identity. Despite its constantly changing meaning as the other, Islam has been still shaping the European identity. This study examines the influence of Islam on the European identity by considering both historical and current dynamics. While the historical process is evaluated in the first part of the study, the influence of Islam on the modern European identity is elaborated in the second part. The general conclusion of the study indicates that the European identity has to be redefined in a way to ensure the co-existence of Muslims and Europeans within the same society.