Islamic education is an indigenous educational system in Indonesia. It is growing in moslem society in any institution. Mahmud Yunus wrote that Islamic education had a good system, and moreover enriched the golden period in Mataram Empire. The development of Islamic education in Indonesia distorted by colonialism, specialy Dutch colonialism for more than 3 50years. They held the political and social intervention based on Christianity mission. Dutch colonialism mafas the ambivalence policies in education. On the one hand they help the Christianity mission and in other hand they distort the development of Islamic education. These policies have negative impact on the educational system in Indonesia. For example of negative impact is the existence of adualism of educational system. This writing elaborates the history of Islamic education in relation to national educational system as realisation of constitution 1945. It will try to trace the development of Islamic education in public school.