Seyid Islam-Khadja was one of the main officials of the Khiva Khanate in the later years of the rule of Muhammad Rahim-khan II (1863-1910). After the ascension to the throne of Esfendiyar-khan (1910-1920) Islam-Khadja got the post of first minister and a mandate for conducting reforms. His position at the court of Esfendiyar-khan, Islam-Khadja secured by giving him his daughter in marriage. The new vizier managed to open several progressive schools in Khiva, built a post and telegraph station. The innovative activity of Islam-Khadja caused concern among those officials who rose to power during the reign of the old khan. In 1911 a group of dignitaries of Khiva handed over to the khan a written protest against the innovations of Islam-Khadja. In response, the vizier accused his opponents of plotting and they were arrested. But the reforms of Islam-Khadja were not incompleted. His adversaries had sent a murderer, and in the summer of 1913 Seyid Islam-Khadja was killed.
Seyid Islam-Khadja built the ensemble in the southeastern part of Ichan-Qala. It consisted of the smallest madrasah in Khiva and the highest minaret in the city. Islam-Khadja minaret imitates the ancient minarets of the 11th-12th centuries. Its top platform (45m.) is the highest observation point in Khiva. Horizontal belts of dark blue, white, blue and green glazed mosaic decorate Islam-Khadja minaret. Its skylight has a stalactite cornice and ceramic lattices – pandjara. The small yard of the madrasah has forty two hudjras. The décor of the main façade makes a good background for the minaret: blue and white majolica, tympans and glazed ornament. The southern sector of the madrasah is occupied by a mosque. Its low heavy dome balances the vertical position of the minaret. Majolica and carved ganch decorate the mihrab niche of the mosque.