St John's church, Waterloo in central London, held the 'Inclusive Mosque' event in what's claimed to have been the first time a full Islamic service has been held in an Anglican church.
Vicar at the church Revd Canon Giles Goddard took part in the service and read a passage from the Bible.
The Telegraph newspaper reports that he invited the congregation to give thanks to "the God that we love, Allah".
He's said to have described the event as 'very moving' and that it was offering people a 'place to pray'.
Evangelical clerics have responded with anger with some claiming the service was illegal.
The Church's law forbids any variation on services if it represents 'any departure from, the doctrine of the Church of England in any essential matter'.
Canon Goddard said he was asked to have the service by the Inclusive Mosque Initiative.
"I said 'yes, of course, come' not realising that this would be controversial," he said.
"We are offering a place for people to pray so it made absolutely perfect sense ... we should be offering places to pray, we are the Church of England."
He told the Telegraph it was not a breach of canon law.
"They could have gone to a community centre I suppose, but they loved being in a church, they were just really pleased and delighted to have the welcome and it was very moving really.
"It is the same God, we share a tradition."
Revd Stephen Kuhrt, Vicar of Christ Church, New Malden, south west London, told the Telegraph: "I am appalled by Islamophobia and when people whip up an anti-Muslim frenzy but the vicar of St John's Waterloo has done something that is completely illegal, which is to allow an Islamic service to be held in his church and then he has participated as well.
"It is no way to handle the complex issue of how to relate to Muslims to hold an Islamic service [in a church] - that would never happen in a Mosque."