This paper aims at revealing the debates on legal theory in the second half of the second Hijri century with the emphasis on legal sources. In addition to presenting the early proto-theories of the Hanafite and Malikite legal schools, this study intends to shed some light on the development of legal theory before al-Shafi‘i, which has not attracted sufficient attention for intense studies so far, by focusing on Muhammad b. al-Hasan al-Shaybani’s work al-Hujjah ‘ala ahl al-Madinah. Al-Shaybani is one of the eminent jurists who lived in the Hijri second century. In addition to his contributions to the formation of the Hanafite school, standing in the heart of major juristic movements as a student of Malik and a teacher of Shafi‘i, he has crucial influence on Islamic legal theory, which can be clearly seen in his work al-Hujjah ‘ala ahl al-Madinah. In this work, he relates juristic debates between the Kufa and Madina schools, which were the two important juristic schools at that time, and compares their legal thoughts. With its significantly rich content, al-Hujja does not merely enable us see live legal discussions on various topics at this early age, but also enriches our understanding of early development of legal theory and makes a unique contribution to the contemporary scholarship in the field.