Abstract This article examines the contentious representation of Yemeni refugees in South Korea to demonstrate that it reflects racialization rather than straightforward Islamophobia. It argues that the relationship between religion and racialization is complex and nonlinear, challenging conventional assumptions that treat religion as a direct or uniform basis for racialization. Drawing on the framework of compressed modernity, the study shows how Korea’s unique socio-religious context challenges linear Western models of secularization and calls for a rethinking of how religion helps constitute racial categories. Religion-based actors in Korea simultaneously function as both racializers and anti-racializers, depending on how their identity has been shaped differently by Korean historical trends and multiple religious traditions. These findings urge reconsideration of religious neutrality in global refugee regimes and call for context-sensitive approaches that recognize religion’s role in both racializing and anti-racializing refugees as observed in Korea’s process of compressed modernity.