The Ibadi school traces its lineage to the aftermath of one of early Islam's sharpest political ruptures. When the fourth caliph Ali agreed to arbitration with his rival Muawiya after the Battle of Siffin in 657, a group of his own supporters broke away, holding that submitting a matter of leadership to human arbitration when God's judgment had already been given by force of arms was itself a betrayal. This group became known as the Kharijites, and its more militant wing went on to a reputation for taking radical positions, including declaring other Muslims unbelievers over serious sin and, in some factions, sanctioning violence against them.
Ibadism descends from the movement's moderate, quietist wing, which rejected that militancy while keeping the underlying conviction that leadership belonged to whoever was most qualified by piety and learning, from any tribe or lineage, rather than by descent from the Prophet's family or by the Umayyad and Abbasid dynastic claims that came to dominate elsewhere. In Basra, the scholar Jabir ibn Zayd al-Azdi is credited by Ibadi tradition with giving this position a settled legal and theological system distinct from both the Sunni majority, which accepted the Umayyad and later caliphates as legitimate, and from the Shia, who held that leadership belonged specifically to Ali's descendants. The result was neither Sunni nor Shia, a third position that has survived, unusually among the Kharijite movement's many branches, into the present day.