Libya is very much defined and structured by Islam, the constitution declares that Islam is the state religion. The constitution secures the freedom to practice other religions, and there are no reports real problems between the Muslim majority and the religious minorities in Libya. Still, the Libyan treatment of Jews between 1945 and 1956 is one where all fundamental human rights were violated.
The Libyan state is though the the Society of the Muslim Call strongly involved in Islamic missionary work across the African continent, providing funds for Muslim groups across the world. Libya also administers the Jihad Fund, providing financial support for the Palestinians.
There are two branches of Islam present in Libya, Sunni and Ibadi; Shi'i is not practiced.
Sunni Islam dominates entirely in Libya. Sunni Islam is largely also a part of national politics and legislation, although interpreted differently from many other Muslim countries. Libya uses the Maliki school (madhhab) of Sharia (Muslim law) mixed with Socialism and humanism. The value of religion is reflected that in Libya use of the Muslim calendar is mandatory.
The head of Libyan muslims is the Grand Mufti, but the secretary-general of the Society of the Muslim Call also exercise great influence on Libyan Islam.
Although official politics aim at being guided by Islam, the more extreme form of implementing religion in society, Islamism, has meet great resistance from Gadhafi.
Popular beliefs are common in Libya, as in most of the Muslim world. Cults for good fortune and local saints are common.
The Sanusi movement was a strong force in the creation of Libyan unity and the laying down the foundations for an independent state. Being a challenge first to the colonizing Italians, later to the forces that eventually took power in Libya, the Sanusis were defeated and reduced to a small and insignificant movement today.
There are communities that belong to the Ibadi branch Islam, the third and smallest of the original branches of Islam.
There is some disagreement to the number of Ibadis in Libya. Some sources (like Wikipedia) indicate between 5 and 10%, but this is unattested. The only known Ibadi communities belong to small towns, and LookLex finds no evidence of a total higher than 65,000. Neighbouring Tunisia, which is part of the same historical Ibadi region as Libya, has no more than 10,000 Ibadis. If anything, the number of Ibadis in Libya is less, not more, than LookLex' estimate.
As the Italian community in Libya was practically erased with the formation of the modern Libyan state, today's Christians belong to recent communities. The largest Christian group is among Egyptian foreign workers, the Coptic. Roman Catholics are also well-represented with the Maltese and Italian communities. There are some more small Christian communities, including the Russian Orthodox, the Serbian Orthodox, the Greek Orthodox, as well as one single Anglican congregation.
Within the group of Other religions, Buddhism is represented with about 20,000 among the foreign workers communities of Sri Lanka, Korean and China.
The history of Judaism in Libya is a tragic one. The presence of Judaism in Libya goes back to 300 BCE, almost a millennium before Muhammad founded Islam. Until the 1940's, Judaism was a strong force in society, but within as little as 11 years all Jews of Libya were forced out of their homelands, finding no other security than that of Israel.
Reports tell that there today is only one Jew left in Libya.