Early Christian and early Islamic texts on dreams and dream interpretation have come under increased scrutiny in recent decades. Dream literature from pagan and Jewish antiquity to the early medieval period demonstrates that dreams, especially prophetic dreams, were used to establish spiritual authority, enforce compliance, and justify violence in a religious context. The common cultural roots of Christianity and Islam emerge when we recognise the crucial role played by dreams and prophecy in the two traditions. The various methodologies used in recent scholarship on dreams and their interpretation are surveyed with a view to identifying those most relevant to the analysis of first-millennium CE literary sources in Latin, Greek, Syriac, and Arabic. The key texts from the three major religious traditions in this period (Western Christian, Eastern Christian, and Islamic) are then analysed with a view to assessing whether early Christians and Muslims understood and taxonomised dreams differently. Literary genre and audience (lay, clerical, or monastic) are revealed as the key determinants of difference, rather than religious origins.