The research aims to study the challenges facing the application of investment funds in Islamic banks In the Palestinian economy, the researcher used the descriptive analytical method in conducting the research, and the questionnaire was applied as a tool to collect information on the research sample consisting of (16) questionnaires distributed to the specialists from the workers in Islamic bank branches in Palestine - Gaza, and the researcher has reached many results The most important: There are lusts in Islamic banks that are geared towards issuing Islamic investment funds in the Palestinian economy, and there is a statistically significant relationship between the knowledge awareness of the public and the awareness of the higher management of Islamic banks on the one hand and the issuance of Islamic investment funds in the Palestinian economy on the other hand. The researcher concluded the following most important recommendations: Urging Islamic banks to spread knowledge of the public about Islamic investment funds, and urged the supervising bodies of financial and banking institutions to create the legal and legislative environment for the issuance and circulation of Islamic investment funds, as well as promoting the encouragement of higher departments of Islamic banks to go towards issuing Investment funds, in addition to urging Islamic banks to provide and diversify the necessary financing for productive projects in the Palestinian economy.