In the early Islamic period, there was an integral relationship between two Abrahamic religions, Islam and Christianity. The standpoint of Islam and its practical philosophy is based on “Peace & Prosperity” for all human beings. Both Muslims and Christians have common ethical and social values in their worldviews. Due to such similar strands in the fabric of morality and faith, Islam gave equal social status to Christians irrespective of color, creed, race, and language. From early period of Islam Muslims always try to engage the Christians and Jews in interfaith dialogue to develop unity and harmony in socio-political circumstances of the world. This study is basically an effort to identify the foundations of interfaith dialogue and harmony between Muslims and Christians. It is also aimed to denounce all the practices of discrimination between Muslims and Christian with concrete arguments on the basis of the Holy Quran, Prophetic Tradition (Sunnah), Bible and Vatican official documents.