Prophet Muhammad was sent to perfect people’s ethics and to establish a community based on moral principles. In the administration he formed, he encouraged public participation, and eradicated idol worship in Mecca by replacing it through constructing places of worship for Muslims. The Prophet also established a comprehensive system of laws in which the duties of each person was taken into consideration to form an independent and unified nation. According to these guidelines, the Prophet succeeded in creating a system grounded on perfect principles in which all believers have equal rights rather than abiding by rules based on tribe, gender, race, or social class. In the previous part, Prophet Muhammad’s ethical management of the economy in the Islamic state was described. This part studies his peace-making strategies as well as managing war and dealing with opposition within and outside Medina, such as the Prophet’s emphasis on use of consultation, as well as leniency and kindness towards war captives. His judicial and political approaches are also taken into account.