Arakkal kingdom (Malayalam: [ɐrɐjkːɐl]) was a Muslim sultanate in Kannur town in Kannur district, in the state of Kerala, South India. The king was called Ali Raja and the ruling queen was called Arakkal Beevi. Arakkal kingdom included little more than the Cannanore town and the southern Laccadive Islands (Agatti, Kavaratti, Androth and Kalpeni, as well as Minicoy), originally leased from the Kolattiri. They owed allegiance to the Kolattiri rulers, whose ministers they had been at one time. The rulers followed the Marumakkathayam system of matrilineal inheritance, a system that is unique to a section of Hindus of Kerala. Under Marumakkathayam, the succession passes to the male offspring of its female members, in other words from a man to his sister's son and so forth. As the only Muslim rulers in Malabar, they saw the rise of Hyder Ali, de facto ruler of the Mysore Sultanate as the opportunity to increase their own power at the expense of Chirakkal, and invited him to invade Kerala.

The Bibi received no special treatment after the treaties of Srirangapatam, and settlement negotiations were long and difficult but she finally signed an agreement in 1796 that guaranteed continued possession of the city of Cannanore and the Laccadive Islands but deprived her of any claim to sovereignty. Yet, as late as 1864, the Bibi of Cannanore was included in an official list of "native sovereigns and chiefs" as being entitled to a seven-gun salute. Because of the outbreak of the war with France shortly after the 1796 agreement, as well as other considerations, the Laccadive Islands remained unnoticed and the Bibi continued to rule them with no restrictions. The islands were misgoverned throughout the 19th century, and the British Government had to assume their administration at least twice, from 1854 to 1861, and again (permanently as it turned out) in 1875. In 1905, in exchange for the remission of overdue tribute, the payment of an annual pension to the head of the family, and the title of Sultan, the Ali Raja at last agreed to cede all rights, whether as sovereign or tenant, to the Laccadive Islands, including Minicoy, which the family claimed as their private property.

The king's palace, which he purchased from the Dutch in 1663, was named Arakkal Palace after the ruling dynasty.

As per legend, the last ruler of the Chera Empire, Rama Varma Kulashekhara Perumal, is said to have been converted to Islam at the hands of Malik Bin Dinar, an Islamic missionary. Perumal along with Malik Deenar came from Mahodyapuram (Old name of Kodungallur -The capital of the Chera Empire) to Thalassery, to visit Perumal's sister and nephew residing there. Perumal's sister Sridevi and nephew Mabeli were residing in a place called Dharmadam north of Thalassery. The relics of their fort is located in the vicinity of Govt. Brennan College, Thalassery. Mabeli was converted to Islam and he accepted the name Muhammad Ali, who later became the first Arakkal Ali Raja. According to folklore, Cheraman Perumal went to Mecca from an erstwhile province named Poya Nadu(Governed by feudal governors named Randuthara Achanmar. The region comprises Edakkad, Anjarakkandy, Mavilayi etc.) now in Kannur district. Malik Deenar built a mosque in Madayi north of Kannur, the third oldest mosque in Kerala.

Perumal's nephew Mabeli was an Arayankulangara Nair, and hence the matrilineal system is observed by the Arakkal royal family. His wife was the daughter of Kolathiri, and they later came to be known as Arakkal Beevi. Muhammad Ali continued in the service of the Kolathiris even after his conversion, and his successors known as the Mammali Kidavus were the hereditary Padanairs of the Kolathiri. Around this time, many Muslim merchant families became financially influential in the Malabar region. When the Arakkal family took control of Laccadives, they achieved near-royal status.

The British military was very eager to make Dharmadam as their base and built a fort there. This small island village was strategically more secure than any surrounding place as it is a hilly island, however, it was governed by Arakkal kingdom, being the first Ali Raja's hometown. Arakkal kingdom was so powerful at that time as an ally of Mysore, even to defy the British. British East India Company was not allowed by the Arakkal kingdom to build a military garrison in Dharmadam. So they were forced to build their base in Thalassery where there was a strong presence of French forces stationed few kilometers away in Mahé.

The palace is three kilometers from Kannur, Kerala, in what is now called Kannur town. The Arakkal family was the only Muslim royal family in Kerala.

The Arakkal family followed a matrilineal system of descent: the eldest member of the family, whether male or female, became its head and ruler. While male rulers were called Adi Rajas, female rulers were known as Arakkal Beevis.