My paper argues that the Ottoman government institutionalized the Caliphate as a colonial institution in Yemen in the context of the early twentieth century interimperial borderland of the southern Red Sea region. The Ottoman presence in Yemen was akin to the European colonial administrations that became the strategically important in the context of new imperialism. From the second half of the nineteenth century to the onset of World War I in 1914, New Imperialism was an era of heightened imperialistic growth. Not only the older colonial powers of Western Europe, but also newcomers such as Germany, Italy, Japan, Russia, and the United States, joined the fresh attempt to expand territorial control. Examining publications such as Sebîlü'r-Reşad, İçtihâd, and İslâm Mecmûası, I explore Ottoman Imperial policies and contemporaneous intellectual discourse about Yemen. I contextualize the Ottoman presence in Yemen in the late nineteenth and early twentieth century as a new imperialism in the minds of the Istanbul-based intellectuals. I argue that the writings about Yemen published in the Istanbul press in the early twentieth century presented the Ottoman administration in Yemen as a colonial territory. I assert that the Istanbul-based intellectuals perceived the Ottoman caliphal authority in Yemen as a colonial administration akin to Italian and British colonies in the surrounding region. I discuss the primary sources from the perspective of the Cambridge school of intellectual history that probes the ideas’ political function in the historical context. I employ Ann Laura Stoler‘s imperial formation idea to integrate the nineteenth-century imperialist discourse into the Ottoman context. The imperial territories are determined by the legal definition of relevant territories. Lauren Benton states that colonial powers found reasons to create semiautonomous spaces that were legally and politically differentiated from more closely controlled colonial territories. The Da’an agreement, between the Ottoman imperial center and Imam Yahya in 1911, distorted the imperial Islam represented by the Sultan Caliphate in the Ottoman Yemeni territory. I discuss the Ottoman caliphate formation as an colonial institution based on the anomaly derived from the official entanglement of the Zaydi authority with the Ottoman Caliphate‘s legal territory. I argue that the Ottoman Caliphate‘s legal authority shaped the Ottoman core Islamic lands, and the formation of the Ottoman Caliphate as an colonial institution in terms of the anomalous legal territories in Yemen in terms of the entanglement of regional Zaydi sovereignty to the Ottoman Caliphate with the Da’an agreement.