This study investigates the stability issues of Islamic banks (IBs) in Gulf Cooperation Council (GCC) countries, with a particular focus on the relationship between IB stability and corporate governance mechanisms. Utilizing the Z-score methodology and examining the impact of corporate governance variables on IB stability, the research aims to assess whether stability issues pose threats to the entire financial institutions in the GCC region. Unlike previous cross-country studies, this research concentrates on country-level data from Malaysia's banking industry, providing complementary insights into the emerging literature on Islamic banking stability. Employing a sample of 100 Islamic banks using the generalized moment method, the study examines variables such as Shari'ah board size, board size, and independent directors alongside the Z-score as the dependent variable, aiming to provide a comprehensive understanding of the governance mechanisms influencing IB stability. The analysis underscores the complexity of the relationship between financial performance and stability, highlighting both positive and negative impacts. While high financial performance can enhance stakeholder confidence and governance effectiveness, it may also lead to behaviors undermining long-term stability, such as excessive risk-taking and moral hazard. The study also emphasizes the significance of financial stability measures, such as the Z-score, in assessing the health of financial institutions. In conclusion, the research contributes to the understanding of stability issues in Islamic banking and underscores the importance of effective governance mechanisms in ensuring the resilience of financial institutions in the GCC region.