Do Muslims believe in purgatory?

No, Muslims do not believe in purgatory. Islam has no separate place or process where souls are cleansed before heaven. Instead it teaches the life of the grave, the Day of Judgement, and then Paradise or hell. Some scholars say a believer who has sinned may face a temporary punishment, but that is not the Catholic idea of purgatory.
What purgatory means
In Catholic teaching, purgatory is a state where souls who died in God's grace are purified before entering heaven. Islam does not teach this, and there is no Quran or hadith text describing such a stage. Muslim scholars do not pray for "shortening" a soul's time in a middle place, because no such place is described.
What Islam teaches instead: the barzakh
Between death and resurrection every soul is in the barzakh, an Arabic word meaning a barrier or interval. It is not a place of cleansing. It is a waiting period, and for believers it can be peaceful.
After resurrection come the reckoning and the final judgement. See What is barzakh? and What happens in the grave in Islam?
Is there a temporary punishment?
This is where people sometimes see a likeness. Mainstream Sunni scholars teach that a Muslim who dies with sins is under Allah's will: He may forgive them completely, or the person may be punished for a time and then be brought out to Paradise. Anyone who dies with faith will never stay in hell forever.
The differences from purgatory are important:
- It is not a standard stage that everyone must pass through.
- It is not a cleansing process organised by the living.
- Allah may forgive entirely, through repentance, good deeds, the prayers of the believers or His own mercy.
Scholars differ on details, and what exactly happens is known only to Allah. See Do Muslims go to hell for their sins?
Why this matters in daily life
Because there is no purgatory, there is no system of paying for someone else's time or buying relief for a soul. What Muslims can do for the dead is pray for forgiveness for them, give charity on their behalf and make sure their debts are settled. Each person's main task is to live well now, repent quickly and trust in Allah's mercy. See Is hell eternal in Islam?
- Islam has no purgatory.
- After death comes the barzakh, a waiting period until resurrection.
- Some believers may be punished temporarily, but Allah may also forgive fully.
- Muslims can help the dead with dua, charity and settling debts.
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