One of the institutions radically being transformed by the information technology is the University, the generic institution that has functioned as the primary creator, disseminator and storehouse of knowledge. What will be the impact of these new information technologies on universities? Will universities integrate globally into an International University to serve as World - Wide cultural bridge, a universal unifying force, bringing peoples and cultures together within the Global Family? Or, will they rather become worldwide "Knowledge Factories" pushing new digital data and packaged information as commodities for economic gain?This paper will discuss these questions. The paper is organized in three Parts. The next Part will present an overview of the crisis of the Western University. This will be followed by a discussion of challenges of Islamic University. Finally, the paper will highlight some of the major conclusions of the discussion.