Sindh Madressatul Islam was founded on 1st September 1885 by a group of enlightened Muslims of Sindh, led by Khan Bahadur Hassanally Effendi, as the first modern Muslim educational institution of Sindh, whose doors were open to everyone irrespective of their religious affiliations.

After end of the Mughul era in the subcontinent and annexation of Sindh by the British by the middle of nineteenth century, the Muslims in Sindh were not ready to accept the new system of education. This closed doors of social, economic and political development on them. This took its toll and by early 1880s the majority Muslim community in Sindh had degenerated to an abysmally low economic, social and political standing. It may be interesting to note that when the University of Bombay conducted the matriculation examination in Sindh for the first time in 1870, not a single Muslim student passed it, though Muslims constituted seventy-five percent of Sindh's population.