Islamic banks are becoming ever more popular and widespread in most countries in the world, in particular after the global crises in 2008. The Islamic banks strengthen their position and role in the global economy and become strong competitors to conventional banks, whether in the field of financial services of in the investments. Therefore, the risk management of the Islamic banking system is becoming more important, because it has an impact on the Islamic financial industry. This study adopts the Murabaha to the purchase order (MPO) financing in the United Arab Emirates (UAE) Islamic banks and focuses on the external and internal acts and behaviours, which impact on the reputation risk of the Islamic banks. This study has three objectives: first, to analyse the importance of reputation risk in the Islamic banking system and its relationship to some acts, inside or outside the IB. Second, to clarify important factors that play a major role in influencing the reputation risk in Islamic banks by the elements of reputation, loyalty, and financial stability. Third, the study examines the role of international organizations and regulatory authorities in the reduction of controversies and conflict, whether among jurists or SSBs, and their role to improve the reputation of Islamic banks. To achieve these objectives, the study combines the qualitative and quantitative approach by using questionnaires and transcripts from interviews. The questionnaires has targeted the Islamic banks at the three largest emirates in UAE: Dubai, Sharjah, adn Abu Dhabi. Furthermore, interviews were conducted with a group of the Shariah Supervisory Boards (SSBs) in the Islamic banks and some of the experts on the Islamic economics, inside and outside the UAE. The results from this study show the following findings: first, reputational risks is considered among the most important risks compared to generic and unique risks faced by the Islamic banks. Second, the findings indicated that factor of controversy of scepticism introduced by some contemporary jurists in Islamic banking products is the primary factor influencing the reputation risk on the Islamic banks. Lastly, the results show that the supervisory authorities and international renowned organizations such as IFSB and AAOIFI have played a responsibility in reducing the controversy and doubts among contemporary jurists and conflict Fatwa between Islamic banks, as well as having a significant role in building bridges among contemporary jurists and the Islamic banks.