The Islamist militant group in Iraq and in Syria that now calls itself the "Islamic State" is deeply concerned about its credentials as a state. The June 29, 2014 announcement of a new Islamic caliphate repeatedly emphasizes that the caliphate has many of the qualities of other states in the international system. Does the Islamic State in fact look like a state? If one measures it according to its legitimacy in the international system the answer is no; however, when one looks at the state from a functional perspective, the Islamic State does indeed perform many of the functions of states in the contemporary state system. This has many implications, including that attempts to degrade and destroy the Islamic State as a group will degrade and destroy the core state functions for millions of Arabs living under its rule. This has the potential to lead to anarchical conditions in a region with extensive existing identity conflict and weapons proliferation. This paper measures the functional success of the Islamic state in six categories, which represent functions of recognized states. They include: 1) tax and labor acquisition, 2) defining and regulating citizenship, 3) providing international security and managing international relations, 4) ensuring domestic security, 5) providing social services, and 6) facilitating economic growth. In addition, the Islamic state's strength is measured using the coding tools of the Fragile States Index to provide comparison with other states in the international system. The paper concludes that the Islamic State has made considerable progress in consolidating its state in the areas of tax and labor acquisition, ensuring domestic security, and providing social services. Its trajectory to date is toward increasing levels of stateness, rather than decreasing state strength. When measured against other states using the Fragile States Index, the Islamic State ranks as the 17th most failed state in the world, meaning that it faces deep challenges in building its state, but has to date succeeded better than 16 other countries currently recognized as states in the international system.