Islamic finance in Algeria is considered one of the most important topics that preoccupy researchers and officials, and Islamic finance in Algeria has witnessed increased interest after the issuance of the latest legislation 02-20 of 03/15/2020, which defined banking operations related to Islamic banking and rules of practice, and allowed the opening of Islamic windows for banking operations. Benefiting from Islamic financing came after this financing proved its efficiency in collecting savings and its participation in financing economic sectors, with its specificity that enables it to deal with the largest segment of society, and thus accelerate towards economic development. Knowing the reality of Islamic finance in Algeria through an indication of the most important potentials, challenges and prospects that show its efficiency and ability to collect savings and invest them within the limits of its capabilities, highlighting its most important achievements and helping to correct its drawbacks. From this point of view, Islamic finance in Algeria needs to try to support its course by evaluating it and correcting some aspects of its financing that are in line with economic reality and the needs of customers and investors.