Some international development agencies from Europe and North America, as well as some multilateral agencies, have played a critical role in instrumentalising religion in their development policy and practice. This article, written from the perspective of an activist‐scholar, reflects on how religion has featured in these donor policies and the implications for advancing rights‐based gender agendas in various contexts. It argues that development policy towards religion takes three broad approaches which are neither mutually exclusive nor do they unfold in a particular linear path. These approaches are to see religion as the main developmental obstacle, the only developmental issue to the exclusion of all others, and the primary solution to developmental problems. All three approaches are problematised in this article and are bound by their essentialisation of ‘Muslim women’ as a homogeneous group, as if bound by a common identity and a common set of needs.