The present paper examines the importance of policy in enabling human resources, following the completion of university-level education, to be involved in the Islamic sector and academic entrepreneurship in syariah and legal studies in Malaysia . This paper argues that the human resources in the Islamic sector in Malaysia and academic entrepreneurship in syariah and legal studies are dependent on students from Islamic religious schools. Islamic religious secondary schools are usually administered either by the federal government,state governments or private institutions. According to the constitutional division of powers, education is a federal matter. Therefore, any educational institutions fallunder the responsibility of the federal government, irrespective of the means of their establishment. However, state-administered Islamic religious secondary schools are considered to fall outside the purview of the federal government due to the fact that such institutions are administered by the state governments. This perceived conflict between state and federal authority in reading the Malaysian Constitution has resulted inthe state Islamic religious secondary schools being virtually ignored by the federal government. This paper demonstrates the effects of the neglect of the Malaysian federal government regarding state Islamic religious secondary schoolsin relation to human resources in the Islamic sector and academic entrepreneurship atMalaysian higher education institutions, especially in the area of syariah and legal studies. The current scenario in the Malaysian Muslim society will be taken into account in portraying the current need for students and graduates of Islamic studies to fulfill vacancies in the job market. The paper concludes with some suggestions to improve the development and management of humanresources in the Islamic sector and academic entrepreneurship in the area of syariah and legal studies in Malaysia.