Despite the long history of Orientalist studies on the Quran, their engagement with Hadith has been relatively late. A common feature of Orientalist studies on Hadith is their particular focus on Sunni Hadith and the generalization of the shortcomings of Sunni hadith sources to the entire Hadith heritage. The neglect of Shiite Hadith works is another deficiency in Orientalist studies on Hadith. The present study, conducted through a descriptive-analytical method and relying on authentic Shiite and Sunni Hadith sources, seeks to elucidate the shortcomings of the “Hadith Qudsi” article in the Encyclopaedia of Islam while providing a comprehensive portrayal of the status of Hadith Qudsi in Islamic studies. The research findings indicate that, despite some merits, the Encyclopaedia of Islam article suffers from ambiguity and lack of comprehensiveness in defining Hadith Qudsi, and the author has failed to provide a precise distinction between Hadith Qudsi, the Quran, and prophetic Hadith. Issues such as the lack of comprehensiveness in mentioning all differences between Hadith Qudsi and the Quran, the claim that Hadith Qudsi are derived from the Old and New Testaments, unsubstantiated content, and the failure to cite all sources are among the other shortcomings of the Hadith Qudsi article.