This chapter argues that the prevalence of certain myths in Islamic tradition predispose some Muslims into adopting exclusivist ideas that define their religious orientations in a manner that can be viewed sociologically and even theologically as extremist. By taking the examples of the alleged genocide of the Bani Qurayza Jewish tribe by Prophet Muhammad and the alleged link between a Yemeni Jew to the founding of Shiite Islam, the chapter shows that these myths have led to justification of anti-Semitism, violence against non-Muslims, and sectarianism in the Muslim World. The chapter concludes by calling for a more critical reading of Islamic tradition.