This paper studies Muslim response to colonialism with reference to religious transformation. It sees how had Muslim scholarly class reacted to colonial rule in later half of the nineteenth century in terms of religious revivalism? What subdivisions had taken place among Sunni-Muslims in result of various reform movements? It also seeks how multiple schools of thoughts resulted in political consciousness of the Muslims and they confidently started taking part in politics in the first half of the 20th century. The study finds that later half of 19th century was basically, a training period for Muslims and highly productive in fields of intellectual and religious reformation and writings. However, the traditionalist Muslims were divided into two groups, politically, in the twentieth century colonial rule. The most prominent group was led by Deoband Ulema who came up with an alliance with the Congress. It established Jamiat-i-Ulama-i-Hind in 1919. They were anti-British yet pro-Congress and wanted, on final stage, transfer of power to one country whereas, Barelwis adopted different track. They joined hands with the modernists, Aligarh educated, who established All India Muslim League in 1906 and came up with the idea of a separate nationalism for Muslims. They played significant role in the struggle to achieve Pakistan. Primary and secondary sources are used. Analytical, descriptive and comparative methods will be applied to assess the findings of the research.