In keeping with Hanafi tradition, Sheikh Muhammad Sodiq Muhammad Yusuf rejects the literal, external interpretation of Qur’anic verses (ayat) and hadith; he carefully studies the historical context and the circumstances in which the particular verse was written or the hadith formulated. Thus, following in the tradition of classical tafsirwriters such as at-Tabari and al-Baydawi, Sheikh Muhammad Sodiq Muhammad Yusuf also follows the contemporary or reformed style of Muslim exegesis.

He argues that, in the conditions of the contemporary world and given the development of civilization, the literal interpretation of ayat will not only repel youth from Islam but will send Muslims back to the Middle Ages. In Islamic studies, these methods are called historically causative.

At the same time, Sheikh Muhammad Sodiq Muhammad Yusuf believes that the commentator should not only directly interpret a particular verse and extrapolate its meaning to fit the contemporary situation but also carefully study the reasons behind the verse and the exact cause of why the verse was sent as well as compare the historical circumstances of these verses.This is how, for example, Sheikh Muhammad Sodiq Muhammad Yusuf approaches the verses in the Quran about jihad. He writes that in the circumstances of the times in which they were written these verses were appropriate, but the invocation of jihad in today’s world should be done not by individuals but by the decision of a council of Ulema of the entire Islamic world.