This paper considers how our understanding of religious identifications may be enriched through social psychological theorizing on group identity. It reviews a range of work (for example, sociological and social psychological) concerning Islam and Muslim identities and develops the case for viewing religious identities as constructed in and through argument. It then seeks to draw out the implications of such an approach for understanding group relations. Although minority religious identifications are often assumed to undermine social cohesion, the social networks within and between groups can contribute to inter-group harmony. For example, reciprocal relationships characterized by trust and reciprocity can constitute forms of social capital that facilitate civic integration. Yet, how such social networks are used and how relationships are developed depends on group members' understandings of their collective identity. As this is contested, it follows that analyses of intergroup relations must attend to group members' identity-related arguments and the strategic concerns that lie behind them. The utility of this perspective is illustrated briefly with empirical material (arising from interviews conducted with Muslim activists) which hints at the importance of investigating social actors' own theories of social capital and how it can be developed. Copyright © 2011 John Wiley & Sons, Ltd.