Within the Muslim world, sentiment towards LGBTQ people varies and has varied between societies and individual Muslims. While colloquial and in many cases de facto official acceptance of at least some homosexual behavior was common in place in pre-modern periods, later developments, starting from the 19th century, have created a predominantly hostile environment for LGBTQ people.

Meanwhile, contemporary Islamic jurisprudence generally accepts the possibility for transgender people (mukhannith/mutarajjilah) to change their gender status, but only after surgery, linking one's gender to biological markers. Trans people are nonetheless confronted with stigma, discrimination, intimidation, and harassment in many ways in Muslim-majority societies. Transgender identities are often considered under the gender binary, although some pre-modern scholars had recognized effeminate men as a form of third gender, as long as their behaviour was natural and not a performance.

There are differences in how the Qur'an and later hadith traditions (orally transmitted collections of Muhammad's teachings) treat homosexuality, with the latter being far more explicitly negative. Due to these differences, it has been argued that Muhammad, the main Islamic prophet, never forbade homosexual relationships outright, although he disapproved of them in line with his contemporaries. There is, however, comparatively little evidence of homosexual practices being prevalent in Muslim societies for the first century and a half of Islamic history; male homosexual relationships were known of and discriminated against in Arabia but were generally not met with legal sanctions. In later pre-modern periods, historical evidence of homosexual relationships is more common, and shows de facto tolerance of these relationships. Historical records suggest that laws against homosexuality were invoked infrequently—mainly in cases of rape or other "exceptionally blatant infringement on public morals" as defined by Islamic law. This allowed themes of homoeroticism and pederasty to be cultivated in Islamic poetry and other Islamic literary genres, written in major languages of the Muslim world, from the 8th century CE into the modern era. The conceptions of homosexuality found in these texts resembled the traditions of ancient Greece and ancient Rome as opposed to the modern understanding of sexual orientation.

In the modern era, Muslim public attitudes towards homosexuality underwent a marked change beginning in the 19th century, largely due to the global spread of Islamic fundamentalist movements, namely Salafism and Wahhabism. The Muslim world was also influenced by the sexual notions and restrictive norms that were prevalent in the Christian world at the time, particularly with regard to anti-homosexual legislation throughout European societies, most of which adhered to Christian law. A number of Muslim-majority countries that were once colonies of European empires retain the criminal penalties that were originally implemented by European colonial authorities against those who were convicted of engaging in non-heterosexual acts. Therefore, modern Muslim homophobia is generally not thought to be a direct continuation of pre-modern mores but a phenomenon that has been shaped by a variety of local and imported frameworks.

As Western culture eventually moved towards secularism and thus enabled a platform for the flourishing of many LGBTQ movements, many Muslim fundamentalists came to associate the Western world with "ravaging moral decay" and rampant homosexuality. In contemporary society, prejudice, anti-LGBTQ discrimination and anti-LGBTQ violence—including violence which is practiced within legal systems—persist in much of the Muslim world, exacerbated by socially conservative attitudes and the rise of Islamist ideologies in some countries; there are laws in place against homosexual activities in a larger number of Muslim-majority countries, with a number of them prescribing the death penalty for convicted offenders. Most Muslim-majority countries have also opposed moves to advance LGBTQ rights and recognition at the United Nations (UN), including within the UN General Assembly and the UN Human Rights Council.

Muslim attitudes to LGBTQ practices has varied throughout Islamic history; legal scholars condemned and often formulated punishments for homosexual acts, yet lenient (or often non-existent) enforcement allowed for toleration, and sometimes "celebration" of such acts. Homoeroticism was idealized in the form of poetry or artistic declarations of love, often from an older man to a younger man or adolescent boy. Accordingly, the Arabic language had an appreciable vocabulary of homoerotic terms, with multiple words to describe types of male prostitutes, including those pre-dating Islam. Schmitt (1992) identifies some twenty words in Arabic, Persian, and Turkish to identify those who are penetrated. Other related Arabic words includes mukhannathun (effeminate men), ma'bûn, halaqī, and baghghā.

There is little evidence for homosexual practice in Islamic societies for the first century and a half of the Islamic era. Homoerotic poetry appears suddenly at the end of the 8th century CE, particularly in Baghdad in the work of Abu Nuwas (756–814), who became a master of all the contemporary genres of Arabic poetry. The famous author Jahiz tried to explain the abrupt change in attitudes toward homosexuality after the Abbasid Revolution by the arrival of the Abbasid army from Khurasan, who are said to have consoled themselves with male pages when they were forbidden to take their wives with them.

According to numerous contemporaneous authors, the increased prosperity following the early conquests was accompanied by a supposed "corruption of morals" in the two holy cities of Mecca and Medina, and it can be inferred that homosexual practice became more widespread during this time as a result of acculturation to foreign customs, such as the music and dance practiced by mukhannathun, who were mostly foreign in origin. The Abbasid caliphate Al-Amin (r. 809–813) was said to have required slave women to be dressed in masculine clothing so he could be persuaded to have sex with them, and a broader fashion for ghulamiyyat (boy-like girls) is reflected in literature of the period. Chief Judge of the Abbasid Caliphate Yahya ibn Aktham permitted homosexual acts, despite being harsh on other sexual acts such as fornication. This had proved controversial with a writer, Abi Salma, who wrote "we had hoped to see justice apparent, but our implorations ended in despair, for, can the world and its people come to any good when the Grand Judge of Muslims sodomizes (yaluṯu)?"