This study investigates the efficiency of Islamic banks in four regions; Africa, the Far East andCentral Asia, Europe and the Middle East during the period of 2003-2008. The nonparametricapproach, Data Envelopment Analysis is utilised to analyse the technical andscale efficiencies of Islamic banks. Overall, the results suggest that mean efficiency of Islamicbanks have declined over the period from 0.746 in 2003 to 0.544 in 2008. During the period ofstudy, our results suggest that pure technical inefficiency has largely resulted in the overallinefficiency of Islamic banks. Using a series of parametric and non-parametric tests, ourresults indicate that there are significant differences in efficiencies between size and notbetween regions. Large sized banks tend to be efficient than the small and medium sizedbanks.