Al-Mu'izz li-Din Allah of the Fatimid Caliphate commissioned its construction for the newly established capital city in 970. Its name is usually thought to allude to the Islamic prophet Muhammad's daughter Fatimah al-Zahraa.

After its dedication in 972, the mosque slowly developed into university. University has long been regarded as the foremost institution in the Islamic world for the study of Sunni theology and sharia, or Islamic law.
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