The spirit Iblis is a Jinn, which are “mischievous” spirits of earth who reside in a universe parallel to the human world while maintaining the ability to interact in both realms. The Jinn are mortal and powerful spirits whose purpose is to tempt and possess (majnun) humans by creating illusions (ghurur) that familiarize mankind with “the eternal fire” of hell.
The Jinn in their natural state are too horrific for mankind to see, they are highly intelligent, they can assume almost any form, and they can do almost anything. There are many different kinds of Jinn: there are those which take on the appearance of the snake; those which fly – the winged Jinn; Jinn that are giants; insect-like Jinn; Jinn that inhabit dead bodies (zombies); and, Jinn that take on human form and, in-so-doing, have the capability of converting to Islam. The Jinn live far longer than humans and the only way they can be detected is through their evil actions – deeds too atrocious for un-possessed humans to enact.
The Jinn are ruled by the one true God who created them more than 25,000 years ago. The Jinn were created from the “searing desert wind” – called Simoon – and are subject to the same universal laws of Islam that mankind must adhere to; the Jinn are also sent prophets bearing God’s message. However, 25,000 years ago the Jinn began to disobey God because they believed themselves to be self-righteous. For that reason, God sent his Angels to destroy them.
It was during this battle that Iblis was recognized from amongst the Jinn by God as “a worthy pupil.” Iblis was brought to heaven by God where he was instructed by the Angels, and, in turn, as he matured Iblis began preaching to the Angels. But, when God created Adam, Iblis refused to pay homage; and, therefore, God condemned Iblis to hell; however, God also granted Iblis “a stay of execution” until the final day of judgement.
At this time the Jinn regrouped on an island in the “Southern Ocean” and formed their own ‘nation’. Iblis left Heaven and rejoined them as their “king;” he had a second name: Azazil. Iblis’ final day of reckoning will come, but until that day comes he reigns as king of the Satans (“shaytans”) who tempt mankind on earth. Although he is evil, Iblis is not the Lord of Evil; and, although fallen from Heaven, he is not a fallen Angel. Rather, Iblis is a “Satan”.
Source: http://web .uvic.ca/~rpn/files/iblis.html