Islamic banking has developed as an important tool for the progress of the economy in many countries because it based on investment and financing projects globally, reported by World Bank's 2015 report. In many parts of the world, Islamic economics has the prospective to contribute and to face the encounters of termination of poverty and rising development. This study undertaken in Bahrain in order for investigate the nexus of Islamic banking and economic growth. Bahrain become one among the most developed Islamic banking activities and other Islamic instruments like Takaful, capital market and so on. This paper based on two correlated specific objectives that were survey the long-term relationship and causal linkage between economic growth and Islamic banking in the Bahrain. Although Bahrain have many Islamic banks operated but for the purpose of the study and research problem with availability of data only one bank was selected which called Al Salam Bank. This bank have good experience, existed for long time and have already announce as one of the as the best and better performance Islamic bank in Bahrain. The study based on quantitative approach and data was secondary and collected from al salam annually financial statements and world bank data set for the period from 2000 to 2020 which was time series. Study variables were Islamic bank’s assets, Great fixed capital formation, GDP per capital and foreign direct investment. Methodology which applied were the unit root problem was tested, then testing the co-integration with long run structural model, then the VECM, then Variance decomposition then Impulse Response Function and finishing persistence profile. Findings shown that Islamic banking in Bahrain have positive long run with positive short run relationship with economic growth. Also result shown that Islamic bank asset take the leading variable on the affect the GDP in Bahrain which supported by VECM. These outcomes give implication that the growth and development of Islamic banks in Bahrain have advantageous on the economy and households income of Bahrain. So it is better for police markers in Bahrain to increase more for taking considerable efforts for Islamic banks operation in order to provide much positive relation with their economy and to be a source for improvement of other sectors of economy in Bahrain.