This study investigates the influence of institutional, financial openness and trade openness on financial development in the case of 26 Muslim countries. For this purpose, panel data have been taken from world development indicators for the period 2002-2014 and the panel data model has been estimated using fixed effect random effect models. The findings of this paper have highlighted the role of institutions, trade and financial openness in financial development. The results show that the quality of institution, trade openness and economic growth have significant and positive effect on financial development. Keeping in view the results, it is recommended that Muslim countries should focus on adopting free trade policies, maintaining law and order situation, elimination of corruption and enhancing the quality of institutions for financial sector development.