North Caucasus regions is dominated mainly by the Salafi and Sufi schools of Islam; more about Sufi Islam here. The Naqshbandi order was the largest sect of Sufism in the Caucasus (read about the founder of Sufism in Chechnya/ Ingushetia here Chechen Ghandi – religion of peace).
North Ossetia and Georgia practice Orthodox-Christianity (the Georgian Orthodox Church is one of the world’s most ancient Christian Churches). Ossetians practiced pagan beliefs until the Russian occupation, when they converted to Orthodox Christianity, though a significant part of the population (especially rural) still practices the native religion. (see here Ossetian Paganism)
Prior to Islam, the people of Caucasus had ancient pagan beliefs (Ingush, Chechens) or practiced Christianity after Byzantine missionaries had reached Caucasus. However, paganism remained the dominant religion as Christianity suffered a severe blow after the Mongol invasion of the 13th century.
Old christian churches can be found throughout North Caucasus (Sentinsky temple in Karachayevo-Circassia is considered to be the oldest christian church in Russia). * The Orthodox Russian church is now claiming the ancient Christian temples, denying that the churches are part of the historical legacy of the local (non-Russian) population. – Moscow Relies on Russian Orthodox Church to Retain Control over Minds in the North Caucasus
The Islamisation of the mountain peoples took place over a period stretching from the 8th to the 19th centuries.
Islam entered Caucasus after the Arabs conquered Derbent city in Dagestan in the 7th century. Kala Koreysh (see here) was the first Muslim settlement used to spread the Muslim faith in the region from the 8th century.
Most of the conversion though took place in the 19th century during the Russian invasion, with the purpose of bringing people together in anti-colonial resistance movements, giving them state-like forms of organization. The conversion to Islam ended in Ingushetia.
In the 19th century, the tribes to the west and east became Muslim (Chechens, Circassians, Lezgin, Inguish etc), while those in the central section (Ossetians, Georgians etc) remained Christian in their majority until today.
In South Caucasus, Georgia and Armenia are Christian, while Azerbaijan is officially Muslim.
For more on the political controversy regarding the religious conflict click here.