Two decades have passed since the September 11 attacks by Islamist militants that shocked the world. Despite this, Islamophobia remains a common phenomenon. In Taiwan, the 2014 12-year Basic Education Curriculum amendments emphasize cultural and global understanding as core competencies. With more than 6 years of implementation, it would be therefore interesting to learn what elementary school students think of Islam. Anchoring on the concepts of intercultural competency development, stereotypes are said to be related to cognitive knowledge, intercultural behavioral abilities, and attitudes. A survey instrument was developed and validated to collect information on stereotypes, skills in intercultural interaction, and attitudes toward Islam. Additionally, cognitive knowledge of Islam was also tested. A total of 712 students participated in the study. Structural equation modelling was used to test the mediating role of cognitive knowledge and intercultural behavioral skills within the relationship between cultural stereotypes and intercultural affects. Findings show that behavioral skills alone are not enough to diminish the negative aspects of stereotypes. Importantly, it is only with the help of cognitive knowledge that the relationship between stereotypes and intercultural affects are improved. It is hoped that by understanding the importance of proper curriculum content, more sustainable coexistence can be established.