This article seeks to present a counter view of the Western critique of contemporary Islam with specific reference to its treatment of the problem of diversity and pluralism. The prevailing Western view of Islam’s experience of diversity and pluralism is that it has failed to positively respond to this important challenge of the modern world. The basic belief underlying this view is that Islam is incompatible with modernity, political democracy, and cultural diversity and pluralism, which are generally considered as the hallmarks of modern Western civilisation. According to this view, only a radically reformed Islam can come to terms with these Western achievements. The Western critique of contemporary Islam is discussed in the context of a post-September 11 world for the important reason that it was the September 11 tragedy that generated a new phase of Western interest in Islam and fresh calls for its reforms. An influential voice in this Western critique is Bernard Lewis who, in his decades of scholarship on Islam, has consistently argued for an Islamic reformation. This article seeks to provide a critical response to the Lewisian idea of Islamic reformation, especially concerning the issue of diversity and pluralism. It argues that a new Islamic understanding of diversity and pluralism is urgently needed in this century, but this can only come about through an authentic tajdid (renewal) that offers fresh interpretations of the religion without destroying its original soul, spirit and character.