A method of economic understanding of Islam is presented by thinker Muhammad Nejatullah Siddiqi with the aim to describe the Ethics of Distribution and Production in Economic Activity. The type of research used in writing this undergraduate thesis is the Library Research, and in collecting data, researcher used a qualitative descriptive method. While the analysis used in this study is qualitative analysis. After conducting in-depth research, the framework of the thoughts of Muhammad Nejatullah Siddiqi, associated with the distribution and production concept in economic activity, were built based on the Quran and as-Sunnah. The research result shows that profit maximization is no longer the prime motive, nor the concept of rationality which has different meaning. The cooperation with other manufacturers to achieve social goals, in order to become the norm, requires greater access to information in the economic system of Islam. Illegal goods will not be produced, luxury goods will be minimized and the production of staples will be increased, while fair trade practices will produce reward, although each individual producer is assumed to have had the desired properties following the guidelines of justice and virtue. Countries are expected to be present in each of all the activities in order to ensure the provision of basic necessities to the supervision according to the applicable rules, thus instilling traits of honesty in any market activity that are all based on the good and honest behaviors in the distribution and production activity to have obligations and responsibility in accordance with the ethics