This article explores the possibility of missional practices of the church toward the Muslim community in Australia, who have coexisted for a long time in Australian history. Unfortunately Islam has been constructed as “other” from the beginning of the immigration history in Australia. This article investigates not only the categorization of “other” of Muslims from the main stream in Australian society but also examines discourses on the topic of being neighbors with Muslims as a Church community today. Firstly, the article focuses on the current issues of Australian Muslims and their community, specifically on assimilation and struggle with the Australian multicultural policy. In addition, it observes the negative non-Muslim perception or ignorance about Islam in Australia, which has grown worse due to ongoing terrorism all over the world by Muslim extremists. In regard to the negative perception of Islam and Muslims in Australia, this article focuses on the particular phenomenon of Islamophobia. The perception is drawn from conservatives with values derived from Judeo-Christianity in Australia; Muslims are stereotyped as a violent community in this particular context. These critical issues, which are observed in light of the multiculturalism, assimilation, and the misunderstanding of Islam in Australia, enable us not only look at the established enforcement of the church and state for the purpose of Australian nationalism, but also see how these policies and political intentions have brought about discrimination and racism against Muslims migrants in the country. Moreover, these reflective issues help us to recognize that Australian Muslims have always lived in the sphere of marginality because of their religion and culture. With this perspective, the finding of this study focuses on the marginalized space of Muslim community. Ironically this space provides various contact points for some missional churches to be a neighbor to the Muslim communities and to build up a reconcilable relationship between Muslims and Christians. Finally, this study introduces some homemaking activities and efforts of the Uniting Church in Australia (UCA) with regard to the concept of locality, the theology of place, which have been formed among Christian communities especially to migrants, women, and refugees.