In this research project I am proposing a novel theoretical framework to explain religious organizations. I incorporate the notion of religious beliefs in a rational framework of social interaction. This will allow me to distinguish this theory of religious organizations from both existing work on religion and from theories of other social organizations. Moreover, it will allow me to analyze the dynamic evolution of religious organizations. The analysis of religion from an economic agent point of view will create new horizons by adding to the rich literature stemming from other social science disciplines and evolutionary biology. The objectives of this research project are: (i) To provide an applicable model of religion that will link the individual and social aspects of religion; (ii) To provide a theoretical framework to understand the relations between different religious groups and between religious and secular groups; (iii) To understand the dynamic evolution of religious beliefs and religious organizations; (iv) To understand the connection between religious leadership and political power; (v) To provide a basis for future empirical work by yielding new testable predictions about the dynamics of religious organizations and religious tolerance.