This paper deals with the issue or act of condemning Muslims as unbelievers and its effects on Islam and Muslims. The Prophet [SAW] has condemned the act of Takfir in strongest term. It was found that the usage of the word kafir in the Qur‟an and Hadith sometimes does not mean an unbeliever, as there is kufr of lesser degree which does not take a Muslim out of Islam if he commits it. The paper also found that calling the Muslims who commit major sins unbelievers was started by the Khawarij. It was also found that there was takfir in Hausa land long before the period of the Jihad leaders and also during their period. The study also found that there are various factors responsible for calling a Muslim kafir. These include little knowledge, extremism, love for material gain, dependence solely on human sense to explain the Qur‟an bad intention of some non-Muslims against Islam, ignorance among others.