Saladin ends the Fatimid caliphate

By the mid-12th century the Fatimid caliphs of Cairo were puppets of their viziers, who bore the royal title of sultan, and the Ismaili creed of the dynasty had lost much of its hold on Egyptians. Al-Adid, raised to the throne at nine in 1160, looked on as rival strongmen fought for the vizierate and as King Amalric of Jerusalem and Nur ad-Din of Syria competed for Egypt. Between 1164 and 1169 Nur ad-Din's Kurdish general Shirkuh campaigned there three times, accompanied by his nephew Saladin; in January 1169 he had the vizier Shawar put to death and took his place, and after Shirkuh's sudden death in March the caliph appointed Saladin vizier.

Saladin — a Sunni serving as vizier of a Shi'ite caliph while still a subordinate of Nur ad-Din — moved cautiously. In August 1169 he crushed a revolt of the black African regiments of the Fatimid army, gave military fiefs to his Syrian troops and the key governorships to his own family, and won over much of the civilian bureaucracy, notably the chancery official al-Qadi al-Fadil. He then dismantled the religious foundations of the regime step by step: in August 1170 the Shi'ite formula was dropped from the call to prayer, Sunni madrasas were founded in Fustat and Shafi'i judges appointed, and in February 1171 a Sunni chief qadi replaced the Ismaili one and the public teaching of Ismaili doctrine at al-Azhar ceased. Urged on by Nur ad-Din and by the Shafi'i jurist Najm ad-Din al-Khabushani, Saladin finally had the Abbasid caliph al-Mustadi named in the Friday sermon — on 10 September 1171 according to one reconstruction of events, a few days after al-Adid's death according to others. The Egyptians received the change with indifference.

Al-Adid, already on his deathbed, probably never learned of it; he died on 13 September, aged twenty. Rumours spread that he had been poisoned or had killed himself, but the historian Heinz Halm found no serious evidence of a violent end. Saladin attended the funeral and let it be known that the throne was vacant; the caliph's family was kept under guard in the palace, and Ismailism, the state faith for two centuries, was gradually suppressed in Egypt. Baghdad was decked in Abbasid black, and al-Mustadi sent robes of honour to Saladin and Nur ad-Din. Saladin governed Egypt nominally as Nur ad-Din's lieutenant, but after the latter's death in 1174 he used its wealth to take Damascus and much of Syria, and the Ayyubid dynasty he founded ruled Egypt until 1250.