The institution of the state is core need of the human society for its solidarity, safety and peace. Islam, being a comprehensive philosophy of life, provides human being with guidance for every sphere of life and for all institutions of society. Islam not only has given basic principles to run a state, but also has practically manifested the same principles in the form of a model Islamic Welfare State, established by the last of the Holy Prophets, Hazrat Muhammad SAW, in the middle ages. The Muslim communities of twenty first century wish to have a modern Islamic state. But the question rises, how to create an Islamic state, in modern times? Same is the topic of the following research. The study discovers the philosophy, distinctive features and basic principles to establish the desired Islamic state, in the light of thoughts presented by Islamist Political scientists. The first chapter is based on introductory study of the institute of state and nature of Islamic state. It discloses the basics of politics in Islam. There is also descriptive study of the basic principle of Islam regarding establishment and governance of state. Second chapter explains Islamic form of government, its structure and distinctive features. In the third chapter, judiciary, education, economy and foreign affairs in Islamic state are explained. Fourth chapter focuses Islamic culture and, social system and civilization in an Islamic state. The last chapter discovers underlying concepts of basic human rights in Islamic state. At the end this chapter analyzes the concept and objectives of Jihad in Islam and international affairs of Islamic state with reference to modern globalized world. The dissertation concludes with the essence and results of research. Hopefully, the confirmatory research will stand out as an important study about a modern Islamic state and will open an arena of further research on the topic.