In most popular Indian or Pakistani cinema, South Asians exposed to America are depicted as disconnected from their ethnic identities, and are either returning home to reclaim it (‘Swades,’ 2004), or serve as simple comic trope of the Indian/Pakistani becoming ‘more American than the Americans’. Two recent films ‘Khuda Kay Liye’ (‘In the name of God,’ 2007) and ‘New York’ (2009) represent, what I argue is the vanguard of a new trend. Primarily, it involves casting Americans as hostile to Muslims, and not because of their country of origin, dress or individual beliefs, but because of their broader religious affiliation as Muslims. American xenophobia becomes the transformative impulse, which metamorphoses liberally minded Muslims, through imprisonment, into the very monsters they were trying to stop. The films operate on a simple understanding of American sentiment, that the ‘good Muslims’ are typically women and American born, ‘bad Muslims’ (Mamdani 2004) are non-whites with Muslim names who do not cooperate in outing fanatics. In my paper, I will explore the construction of Islamic identities in these films, as well as discuss general trends in South Asian cinema about Islam. I will consider the following related questions: Are these films a new version of the ‘empire talking back’? Or, are they affirming the widely held belief that the American hunt for terror simply creates more of it? Perhaps they are operating in both modes, as a cautionary tale to Americans about Frankenstein’s monster, and a warning to Muslims about the dangers of contact with Americans.