The foundation of al-Kulshani was built as a Sufi complex dedicated to the Khalwati order by Shaykh Ibrahim al-Kulshani between 1519 and 1524. The founder, who served as a government official under Uzun Hasan of the Aq Qoyunlu dynasty, fled after the Safavid conquest of Azerbayjan and took refuge in Egypt under the Mamluk Sultan Qansuh al-Ghuri.

This is the earliest Sufi complex to be referred to as a takiyya, a Turkish term introduced into Egypt after the Ottoman conquest and applied to Sufi religious foundations which included residences for the Sufis. It reflects a clear emancipation from the rules that governed Sufi architecture in the previous era when it conformed to the prevalent styles of religious foundations. Unlike official religious architecture, Sufi architecture from the early Ottoman period did not adopt a specific style or spatial pattern, but instead was independently shaped by the requirements and character of the shaykh whom the foundation followed.