In 1909, a trade organization called the Islamic Trading Association (Indonesian: Sarekat Dagang Islam) was established in Java, then part of the Dutch East Indies, to protect the interests of batik traders in the face of competition from ethnic Chinese merchants.

[4][3][5][6] Following their 1942 invasion of the Dutch East Indies, the Japanese authorities banned the PSII but allowed the MIAI to continue.

In November the Japanese established an organization called the Council of Indonesian Muslim Associations (Masyumi) in an attempt to control Islam in Indonesia.

However, Muslims resented the attempt to use them as tools of the Japanese and were especially angered by the obligation to bow towards the Imperial Palace in Tokyo (kyūjō-yōhai [ja]), rather than Mecca.

The founders wanted to take advantage of the organization's fame and structure, but there was considerable discussion as to whether to retain the name, due to its association with the Japanese occupiers.

The first, led by Natsir, attracted support from the younger generation who had participated in the Indonesian National Revolution and from the non-Javanese membership.

The second faction, headed by Soekiman Wirjosandjojo, was supported by ethnic Javanese members, and had closer links with the Nahdlatul Ulama, the PNI leadership, and President Sukarno.

On this basis it was awarded 49 seats, the largest number, in the 232-seat legislature, the People's Representative Council, when this was formed following the dissolution of the United States of Indonesia in August.

However, this cabinet lasted less than seven months, falling in March 1951 after losing support from the smaller parties and parliament.

It was followed by two Masyumi-PNI coalition cabinets, the first from April 1951 to February 1952 with Masyumi figure Soekiman as Prime Minister (but with no representation from the Natsir faction) and the next (April 1952 - June 1953) led by Wilopo from the PNI, with a Masyumi deputy prime minister, Prawoto Mangkusasmito.

[17][18][19] Shortly after the Wilopo cabinet took office, the Nahdlatul Ulama began the process of withdrawing from Masyumi following protracted disputes, including a conflict over the cabinet's refusal to reappoint key NU figure Wahid Hasyim to the post of religious affairs minister.

One of Indonesia's first female legislators, educational activist Rahmah el Yunusiyah, was elected from West Sumatra for the Masyumi party at this contest.

In November 1957, senior Masyumi figures Mohammad Natsir, Sjafruddin Prawiranegara, and Burhanuddin Harahap, joined the rebels in the Sumatran city of Padang.