Islam makes no distinction between the sacred and secular, thus Islamic law, or sharia, governs not only religious affairs but also daily ones, from criminal justice to banking and business ethics. Traditional sharia, for instance, dictates that Muslims should only invest in ventures that hew to Islamic doctrine. Since the Koran forbids drinking, investing in a winery is not permitted.

Sharia literally means "path" or "path to water," referring to the path a Muslim must follow to salvation. The law comprises multiple elements: most important is the instruction of the Koran, considered the literal word of God; next is the sunnah, or the model of how one should live set by the Prophet Muhammad; the final components are the ijma, or consensus of Islamic scholars, and the qiyas, a sort of reasoning by analogy that extends the law to issues not explicity addressed in the holy texts (for example, extending the drinking prohibition, drugs may also be assumed to be forbidden).

Most Middle Eastern countries have some degree of sharia law integrated into their legal codes. Mostly these measures deal with issues of personal-status, such as marriage and divorce, while sharia guidance on criminal law has largely been tempered with legislation that is seen as more modern or secular; generally adulterers are not stoned to death in the contemporary Middle East. Even so, Saudi Arabia and Iran claim to implement sharia fully in all matters.