The idea of ​​establishing INSANIAH was sparked in 1993 when two High Officials of the state government, The Honourable Dato' Paduka Hj. Ahmad Basri Mohd Akil, Kedah State Government Secretary and Hj. Sukri Hashim, the General Manager of the Kedah State Islamic Foundation (YIK) visited students from Kedah who were studying at Al-Azhar University Cairo, Egypt. The purpose of the visit back then was to check on the students’ welfare. Starting from this, there was a proposal to be submitted to the state government, to create an Islamic Higher Education Centre in the state of Kedah.

In this regard, The Most Honourable Menteri Besar of Kedah Darul Aman at the time, Tan Sri Dato' Seri Hj. Osman Hj. Arof has ordered that a proposal be drawn up with the concept of establishing an Institute of Higher Islamic Studies in the state of Kedah. It shall implement a twinning programme with Al-Azhar University, Egypt and conducts a working visit to make preliminary consultations with Al-Azhar University from 26th to 31st March 1994.

Al-Azhar University made a return visit to the State of Kedah from 1st to 7th September 1994 led by its Rector, His Excellency Prof. Dr. Abdul Fatah Al-Syeikh Husaini until the cooperation agreement (MoU) was signed at Wisma Darul Aman, Kedah on 3rd September 1994 between the former Menteri Besar of Kedah, Tan Sri Dato' Seri Hj. Osman Hj. Aroff and the Rector of Al-Azhar University, Prof. Dr. Abd Fattah Husaini El-Syeikh.

Following this noble effort, the Kedah State Legislative Assembly approved the establishment of INSANIAH, on 7th December 1994 under enactment No. 4 of 1995 and was then gazetted on 22nd June 1995.

The institution was given the name as the Islamic Religious Institute of Kedah Darul Aman or known as INSANIAH. The Arabic name is 'Al Jamiah Al Islamiah Al Hukumiah Bi Kedah Darul Aman'.

At that time, INSANIAH was granted the status of (Government Higher Education Institution [IPTK]) by the Malaysian Ministry of Education and registered under the Education Act 1996 with registration number K/IPTK/07 (021). INSANIAH also has an executive body known as Majlis Insaniah which operates as a body that manages, controls and administers INSANIAH. This event was chaired by The Most Honourable Menteri Besar of Kedah Darul Aman.

INSANIAH started its operations on 2nd January 1996. During that time, it only ran the Islamic Studies programme in partnership with Al-Azhar University, Egypt which offered a first-degree programme in the fields of Usuluddin, Sharia and Arabic. The academicians at that time were only 9 lecturers of Associate Professor level and 6 of them were from Al-Azhar University, one from Indonesia and another 2 were from Malaysia. The first intake amounted to 43 students in the 1995/1996 session.

In the early stage of the establishment of INSANIAH, it was placed in a temporary campus at No 45, Lorong Perak 18, Seri Mergong, 05150 Alor Setar Kedah. This campus is located in the Mergong Light Industrial Park area, approximately 1.5 kilometers from the town of Alor Setar, Kedah Darul Aman.

In January 1998, INSANIAH was allocated around RM 7 million by the state government worth in purchasing two building blocks located at Taman Wira Mergong, Jalan Sultanah, 05350 Alor Setar, Kedah Darul Aman.

In 2004 INSANIAH further allocation of RM 7.3 million given by the state government to build additional 2 blocks of 4 floors building at its main campus.

In May 2000, INSANIAH took another step forward by establishing a second campus in Jalan Istana Kuning, Alor Setar known as Kulliyyah Management Branch Campus to coordinate the Diploma in Management and Diploma in Accounting programme which started its session in 2000/2001 on 11th August 2000. A year later, INSANIAH offered Diploma in Information Technology which began its session in 2001/2002. All programmes offered were monitored by Universiti Utara Malaysia (UUM).

INSANIAH has also been given further recognition in January 2001 when the Kedah State Government decided to change the administration of Ma'ahad Tahfiz Al-Quran (MTAQ) Negeri Kedah Darul Aman which has been operating since 1985 be under the Islamic Foundation of the State of Kedah (YINK) and the Kedah Islamic Religious Council (MAIK) to INSANIAH.

The development of INSANIAH is not only from a physical point of view but planning is arranged to upgrade INSANIAH to University College through various strategic planning workshops and meetings. As a result, on 18th May 2006, INSANIAH received the letter of approval to be upgraded to INSANIAH University College. During that time, Dato' Seri Mustafa Mohamed, the Minister of Higher Education conveyed the offer letter of upgrade to Prof. Dato' Dr Sayyid Muhammad Aqil bin Ali al Mahdaly, the Rector of INSANIAH during that time at Cinta Sayang Golf and Country Club Sungai Petani. Since then, INSANIAH has experienced a massive transformation with the enrollment of students including those from abroad.

During the era of the Most Honourable Menteri Besar of Kedah, Tan Sri Dato' Seri Diraja Ustaz Haji Azizan Bin Abdul Razak the Chairman of the Board of Directors of INSANIAH, he appointed Prof. Dato' Dr Jamil Osman as the fourth Rector of INSANIAH on the 1st May 2008. In 2009, INSANIAH continued to progress in offering as many as 40 study programmes from foundation level to PhD level compared to only 7 programmes previously. 4 Kulliyyah and new academic centres were also established which were Kulliyyah of Engineering and Technology, Kulliyyah of Nursing, Centre of Graduate Studies and Research, Centre of Foundation Studies and Centre for Languages.

INSANIAH has also opened its new branch campus at Bandar Aman Jaya Sungai Petani after receiving the approval to operate the branch campus on 1st January 2009 which was conveyed by Dr. Zubaidah binti Aman, Chief Deputy Director of the Department of Higher Education (Malaysia). Thus, the first students of the Sungai Petani campus began to register on 19th January 2009 in the field of Creative Multimedia.

At the 10th Convocation Ceremony on 12th August 2008, His Majesty Tuanku Sultan of Kedah was proclaimed as the Chancellor of INSANIAH University College. Meanwhile, Dato' Dr Abdul Halim Ismail was appointed as the first Pro Chancellor 1 of INSANIAH, and Dato' Dr Afifuddin Omar was appointed as the first Pro-Chancellor 2 of INSANIAH.

On 18th February 2009, INSANIAH kept forming history when the dream of having a more conducive and comfortable campus began to progress according to plan with the groundbreaking ceremony for the main campus of INSANIAH Kuala Ketil officiated by the Honourable Tan Sri Dato' Seri Diraja Ustaz Haji Azizan Bin Abdul Razak. The first phase of 832-acre land was expected to be completed in 2012.

INSANIAH University College (KUIN) has officially changed its status to a full-fledge university known as Sultan Abdul Halim Mu'adzam Shah International Islamic University (UniSHAMS) after receiving the Certificate of Registration from the Ministry of Higher Education on 5th February 2018. The Certificate of Registration was conveyed by the Director General of Higher Education, the Honourable Datin Paduka Datuk Prof Ir Dr Siti Hamisah Tapsir to the 6th Rector of UniSHAMS, Prof Dato' Dr Mohd Fakhrudin Abdul Mukti in a ceremony held on 8th February 2018. It was also witnessed by the Minister of Higher Education, Dato' Seri Idris Jusoh; Menteri Besar of Kedah, Dato' Seri Diraja Ahmad Bashah Md Hanipah who is also the Chairman of the UniSHAMS Board of Directors; Member of Parliament of Baling Datuk Seri Panglima Abdul Azeez Abdul Rahim; the Chairman of the Committee of Education, Transport and Non-Governmental Organization (NGO) of Kedah and Datuk Tajul Urus Mat Zain as the member of the Board of Directors of UniSHAMS.

UniSHAMS is an IPTS owned by the Kedah state government which has 6 Kulliyyah and 4 Centres of Studies. It also offers 42 programmes at various levels starting at the Foundation level up to the highest level which is Doctor of Philosophy. The latest number of UniSHAMS students is a total of 4,082.