Stacey Eden, 23, uploaded footage to Facebook showing a middle-aged woman slating Islam to Hafeez Ahmed Bhatti and his wife.
The commuter, dressed in red, allegedly called his wife an ISIS supporter as she sat opposite and said all Muslims should be kicked out of Australia.
Mr Bhatti said: “She asked my wife why she was wearing a scarf when it was hot outside – when my wife answered her I thought the woman was asking to be friendly.
“Then she started saying Muslims like us are trying to conquer Australia and behead everyone here. We were absolutely shocked.”
Stacey is heard intervening and telling the outraged commuter to “Shut your mouth if you’ve got nothing nice to say.”
She then adds: “What’s it got to do with this poor lady? That’s not her doing it, that’s a minority of people all over the world.
“She wears it for herself because she wants to be modest.”
Mr Bhatti told MailOnline Australia: “This sort of thing has happened before, but you try to ignore it…God bless Stacey Eden who supported us.”
Stacey, from Australia, uploaded the footage shot in Sydney, to Facebook where it quickly went viral.
Underneath the clip, she wrote: “So I sat there for a good 10 minutes before i started recording this.
“While I listened to this woman bad mouth Muslims and call the lady sitting opposite me an ISIS supporter because she wore a scarf.
“Then she told me to go join ISIS because i was sticking up for her.
“People like this make me sick. People who are so ignorant and disrespectful to other people who were clearly sitting there minding their own business.
“She was saying some pretty horrible and hurtful things before i spoke up then as soon as I started defending them she stopped.
“People need to stop judging and putting others down over religion!
“Every religion has good and bad but if you take it back to the foundations, every religion is also built on love – to love one another.
“The purpose of religion is to control yourself, not to criticise others.”
The video drew praise from Muslims and people of other religions from around the world.
User Mudassar Mumtaz Khokhar wrote: “Thank you. And it was heartening to know that you know why that lady was wearing a scarf. You are awesome.”
Ayman Medhat added: “I cant find any words to describe your actions there, God bless you.”
Police said they are encouraging witnesses of the incident to come forward.
