In public debates, the meaning of the term “religion” appears to be almost self-evident, whereas in the social sciences and humanities defining religion is a highly contested matter. Indeed, from a scholarly perspective, it is far from evident what should be understood by religious, religiosity, and religion. In order to examine the role of Islamic traditions in contemporary Muslim societies, however, we necessarily have to rely on some concepts with which we are able to grasp religion in its structural dimension as well as in the various forms in which it is a part of individual and collective social action. This chapter will, therefore, answer the question as to how we can reach a conceptualization of religion with which we are able to observe religious phenomena. We first shall present some general conceptual reflections about religion that have guided our study. We begin with a brief discussion of different ways to define religion, situating our own concept within the context of this scholarly discussion. Then we introduce our approach to conceptualizing religion embedded in the general theory of modernity that we have outlined so far. We specify our analytical angle on religion with reference to the three levels of analysis at the macro, meso, and micro levels. The macro dimension of religion we try to capture with the help of modern systems theory, defining modern religion at the societal level as a relatively autonomous social subsystem.