According to strong oral tradition, it came into existence in 1794 during the first British occupation of the Cape of Good Hope and was the main Muslim institution from 1804 until 1850.
Imam Abdullah Kadi Abdus Salaam, also known as Tuan Guru, was the first Imam at this Masjid. In 1793 he was released from Robben Island, having served a prison sentence of 13 years. When he established the first madrassah in 1793, the property, a warehouse, was rented by Coridon of Ceylon, the freed slave of Salie van de Kaap. Tuan Guru then made an application to the Cape authorities for a site in Cape Town for the construction of a masjid but it was refused.
Saartjie van die Kaap (daughter of the first Muslim to own properties in Cape Town) then made land available for the building of a mosque. This masjid was established during the era of slavery, and established its roots in a climate of social and political prejudice. The advent of the Auwal Masjid made it possible - for the first time - for Muslims to pray in public in the Cape Colony.