The Muslim community in Austin founded Austin Peace Academy (formerly Peace Elementary School) to meet the crucial challenge of stimulating the minds of the students who enroll in the school while at the same time enabling them to preserve their Islamic identity, heritage and practices.

Austin Peace Academy was established in 1997 in a small building with about sixteen students as the first Islamic school in Austin. The school was initially named Peace Elementary School and was located in 1906 Nueces Street, Austin, TX 78705. The first year school offered Pre-K to Kindergarten (KG). In 1997, the school was moved to its current location at 5110 Manor Road, Austin, TX 78723.