The paper examines the ways in which diversity is interpreted as either "good" or "bad" within the context of Islamic theology. The analysis is centred on the Sunni work al-Farq bayn - al Firaq by al Baġdādī (d. 1037) and the Shiite work Nahj al-Ḥaqq wa Kashf al-Ṣidq by al-Ḥillī (d. 1325). The analysis considers the ways in which diversity is presented as either a possibility or a desirable outcome or conversely as an impossibility or a problematic phenomenon. The comparison demonstrates how the same sources are utilised and interpreted in ways that legitimise specific group affiliations. It highlights the role of theological approaches in constructing inclusion and exclusion, as well as the boundaries between accepted and rejected forms of diversity. Furthermore, the study examines how the methodologies of these two traditions reinforce their respective exclusive truth claims. The objective is to elucidate the mechanisms underlying theological interpretations of difference and to illustrate the dynamics involved in the perception of diversity. Consequently, the paper contributes to a deeper understanding of how theological traditions engage with difference and the significance this holds for their self-definition.