The idea that Islamic schools do not teach about other cultures and beliefs is disproved at Al-Sadiq and Al-Zahra school in north-west London.
Inspectors visiting the private school last October found 15-year-olds grappling with the differences between the Islamic and atheist views of evil and suffering.
An Islamic studies class was split into Muslim and atheist camps with each challenging the other to justify their opinions.
Dr Mohammed Movahedi, the head, said: "They are going to be citizens in this country and they must know about their rights and what is expected of them."
The school uses visits from public figures, including The Duke of Edinburgh two years ago to educate pupils about British society, he said. Pupils also get the opportunity to visit Parliament as part of their education about public institutions and services.
The mixed school for three to 16-year-olds charges fees ranging from Pounds 1,800 per year for reception pupils to pound;3,450 at secondary level.
It emphasises moral education which the Office for Standards in Education found enabled pupils to distinguish between right and wrong and respect the law.
"Pupils are enabled to develop their self-knowledge, self-esteem and self-confidence through... Islamic studies," Ofsted said.
"A great deal of attention is paid to the theme of Islamic akhlaq (good character); all classrooms keep akhlaq charts as part of the reward system.
Pupils are encouraged to discuss and evaluate moral and spiritual issues and apply this to their personal lives."