Islamnagar is a small village situated around 13kms away from the the city on the Bhopal-Berasia Road. Formerly a fortified city, Islamnagar was the capital of the Bhopal princely state for a brief period. The major attraction of this place, is the ruins of the palace and pavilion of Bhopal's Afghan rulers which was built by Bhopal's founder Dost Mohammed Khan. The pavilion, a synthesis of Hindu and Islamic decorative art, has pillars richly decorated with floral motifs.

The double-storied Rani Mahal and the Hamam of the Chaman Mahal are the other attractions of Islamnagar.