The Islamic era, which began in the 7th century, contains many events critical to the formation of Yemen and the Yemeni people. The force with which Islam spread from its origins inMecca and Medina in the nearby region of Al Hijaz (the Hejaz) led to Yemen's rapid and thorough conversion to Islam. Yemenis were well-represented among the first soldiers of Islam who marched north, west, and east of Arabia to expand Muslim territory.

Yemen was ruled by a series of Muslim caliphs, beginning with the Umayyad dynasty, which ruled from Damascus in the latter part of the 7th century; Umayyad rule was followed by the Abbasid caliphs in the early 8th century (seeCaliphate). The founding of a local Yemeni dynasty in the 9th century effectively ended both Abbasid rule from Baghdad and the authority of the Arab caliphate. This allowed Yemen to develop its own variant of Arab-Islamic culture and society in relative isolation.

In the 10th century, the establishment of the Zaydi imamate, essentially a theocracy, in the far north of Yemen forged a deep, lasting link between the towns and tribes of the northern highlands and the Zaydi Shiite sect of Islam. By contrast, the two-century-long rule of the Rasulids, beginning in the 1200s and initially based in Aden, identified the coastal regions and the southern uplands with Shafi'i Islam. The Rasulids, one of the major dynasties in the history of Yemen, broke from the Egyptian Ayyubid dynasty to rule independently. Their capital, later located at Ta'izz, was famous for its diverse artistic and intellectual achievements.