Companies are competing to improve quality in the face of global market competition and so is Islamic banking industry. According to the Indonesian Islamic Banking Roadmap 2015-2019 issued by the Financial Services Authority (OJK), two out of the seven policies to be implemented are to improve service quality and product diversity, and to improve the quality and quantity of HR and IT. In any development of any industry, especially in the world of Islamic banking, the keys to improving competitiveness are companies’ service quality and performance. This research aims to analyze the effects of TQM implementation on service quality and performance of Islamic banks. Findings of this research show that TQM has a significant effect on service quality. Similarly, service quality has a significant effect on performance of Islamic banks as well. However, TQM has no direct significant effect on the performance of Islamic banks.