Islamophobia has become a significant problem across the Western world. Australia is no exception. The emergence of far right groups and a political environment that allows anti-Islamic discourse has created an increasingly unwelcome environment for Muslims, even though multiculturalism has long been a fundamental marker of Australian daily life. The rise of Islamophobia has been damaging to Australia. This paper explores the rise of anti-Islamic sentiments in Australia and the increasing marginalization of Muslim youth, showing that Islamophobia not only breaks the bond between Muslim youth and Australian society, it also polarizes relations within Australian Muslim communities.