A critical survey of the development and growth of Islam in Nigeria would reveal how the culture has moved from the royal courts to the market-place to impact on the various facets of the Nigerian culture at large. This paper examines the stages of its establishment, growth and development among the Yoruba-speaking people of the Federal Republic of Nigeria. Drawing upon the works of Gbadamosi, Doi and others, this paper begins by examining the popular Oduduwa legend and moves on to assess how the 19th century Jihad, the return of the freed slaves and many years of colonial experience combined to set the stage for the transformation of Yoruba cultural heritage. The result was clearly manifested in the language, literature, arts architecture and legal concepts. The underlying assumption of this paper is that contrary to the perception of Islam as -esin imale- the religion has positively contributed towards the growth and development of Yoruba culture and has the potentials of sustaining its achievements in a peaceful democratic environment.