The Islamic University College, Ghana (IUCG) was established in September 2000 by Ahlul-Bait Foundation, a semi–Non-Governmental Agency of the Islamic Republic of Iran. The Foundation was running a number of cultural, religious and educational Institutions in both Iran and several countries worldwide. The Foundation has been in Ghana since early 1980s and has undertaken a number of projects in Health, Agriculture and Education in support of some poor and deprived communities in the country.

The Ahlul-Bait Foundation decided to establish the Islamic University College, Ghana (IUCG) when the Ghana Government policy was changed in 1997 to allow for private participation in tertiary-education delivery, as a way of encouraging secular education (especially at the tertiary level) among Muslim and deprived or marginalised communities in Ghana. Land at the present campus (East Legon – Adjiringanor in Accra), which had been acquired earlier in 1995, was re-allocated for the establishment of the University to serve the West African sub-region.

The Foundation conceived the idea of a University College as far back as 1986 by opening an Islamic Training Institute in a rented apartment at Abelenkpe, Accra. The first batch of 15 students was admitted into the Institute to do a two-year course in Islamic Theology with the main objective being to enrich the Ghanaian Muslim Youth with high spiritual and moral standards. In 1988, the Institute was registered as the Ahlul Bait Islamic School. This was in pursuance of the desire to provide facilities for research into Islamic sciences for Muslim students and scholars from Ghana and the neighbouring countries.

The Islamic University College, Ghana was granted interim accreditation by the National Accreditation Board with effect from 2001. On 10th April 2001, 15 students were given admission to do a 4-year Bachelor of Arts programme in Religious Studies (Islamic option). In September the same year, a second batch of 42 students was admitted into the University College. In September 2002, accreditation was given for the University College to introduce a 4-year degree programme in Business Administration with specialisation in Accounting, Banking and Finance, and Marketing.