Efforts by this drab commuter town north of London to shed its image as an extremist hotbed suffered a setback in December when local resident Taymour Abdelwahab blew himself up in a botched suicide attack in Stockholm.
Luton, where around 15 percent of the population of nearly 200,000 are Muslim, was also the departure point for the four suicide bombers who killed 52 people on London's transport system on July 7, 2005.
Now the anti-Islamist English Defence League (EDL), which formed in Luton two years ago amid simmering communal tensions, will hold a march in the town on Saturday that is expected to draw thousands of supporters.
The march has unnerved residents of Bury Park, a heavily Muslim neighbourhood in Luton where mosques and religious schools nestle among red brick houses and shops.
"We're a very close-knit community in Luton and the last thing we want is any sort of trouble or any marches. People just want to get on with their lives," said local business leader Mohammed Nadeem.
Qadeer Baksh, the director of the Luton Islamic Centre, says the town's reputation is undeserved.
"To say that Luton is a hotspot for extremism, is wrong. There is a lot of good integration of faiths, of the races," Baksh says.
It was at this centre that Abdelwahab once worshipped -- but Baksh said the Iraqi-born bomber stormed out of the mosque in 2007 and never returned after staff "exposed" his radical beliefs.
Baksh admits they never informed the authorities of their concerns about Abdelwahab, but said the confrontation with him was part of a long process of trying to rid Luton of radicalism.
Luton's problems with extremism began in the 1990s when its proximity to London made it a recruiting ground for fiery imams from the notorious Finsbury Park mosque including Omar Bakri and Abu Hamza.
Bakri left Britain for Lebanon in 2005, where he faces criminal charges, while Hamza is now in jail.
In 2001, two Luton men were killed fighting with the Taliban in Afghanistan, then in 2004, the ringleader of the 7/7 bombers met near Luton with some of the men involved in a failed plot to explode fertiliser bombs in Britain.
Trouble flared again in March 2009 when Muslim hardliners jeered a homecoming parade for British troops who had served in Afghanistan.
That incident spawned the EDL and the far-right group has since rallied in several towns against the "Islamisation" of Britain.
"Luton is the birthplace of the EDL," EDL spokesman Guramit Singh said.
"Muslims are basically moving into areas, taking over the areas, forcing other people to move out," claimed Singh, who as a Sikh is a rare ethnic minority member of the group.
"Islam is militant, it is extreme, it wants to rule the world, they have a plan within 30 years to turn this country into an Islamic state."
The EDL backtracked on plans to invite US preacher Terry Jones, who caused a furore last year by planning an "International Burn a Koran Day" on the anniversary of the September 11, 2001 attacks, to Saturday's rally.
Tensions in Luton have also risen as members of the Islamist group which jeered the troops in 2009 have themselves been back on the streets, handing out leaflets in a bid to recruit new followers.
They have links to Al-Muhajiroun, an extremist group banned by Britain which was led by Bakri.
But the borough council denies that Luton is a problem town -- much less any kind of symbol for multicultural tensions in Britain.
The borough council's "Luton in Harmony" campaign just marked its first anniversary. So far 13,000 people have signed a "harmony pledge" and the council has handed out 60,000 badges.
"It's not to say that Luton doesn't have issues, but I don't recognise the town I read about in the newspapers. I feel the fact that the 7/7 bombers got on a train at Luton does not amount to a link to extremism," says Sarah Allen, the council's inclusion and cohesion manager.
She says the council is trying to tackle poverty and other community issues that could fuel tensions.
Baksh, from the Luton Islamic centre, is optimistic.
"All you have to do is remove the extremism of the EDL, get them out of the picture, get these Muslim extremists, the Al Muhajiroun, out of the picture," he said.
"Then Luton will be back to the 80s and 90s where everything was fine."