The Chancellor defended the decision to widen the scope of the inquiry, saying it was right to look at “all other types of prejudice”.
Prime Minister Boris Johnson committed to holding a probe during the Tory leadership contest, but has since said it would be a “general investigation”.
While running to become Tory leader, Mr Javid said he backs having an external investigation in the Conservative Party into Islamophobia.
During the BBC Tory leadership debate in June, Mr Javid asked his colleagues if they'd commit to an external investigation into Islamophobia in the Tory party.
After some shuffling and nodding from his rivals, he said: "It's great that we all agree on that."
Calls for an independent inquiry into the issue have been led by former party chairman Baroness Warsi – who on Saturday accused Health Secretary Matt Hancock of “whitesplaining” when he said others “take a more balanced approach” to the issue than her.
Mr Javid told the BBC One’s The Andrew Marr Show there would be an inquiry into “anti-Muslim hatred” which would start this year.
But pressed on the scope, he said: “We will have an inquiry into prejudice and it will absolutely mean looking into anti-Muslim hatred, and making sure that our zero tolerance policy – absolute zero tolerance – is as effective as it can be and looking to see what other procedures we could have in place.
“But at the same time it also makes sense to look at any other kind of prejudice – it’s absolute sense to look at all types of prejudice, in any form, because it is all unacceptable.
“I don’t accept it’s very different: if you’re going to look into prejudice it is right… at the same time that you look at all other types of prejudice.”
ITV News exposed more than 100 alleged cases of Islamophobic or racist content posted online by people claiming to be Conservative Party members in May this year.
A dossier of the cases was passed to ITV News, in which Tory party members are alleged to have said:
"We are letting our children down by allowing this cult to take over our country"
"We don’t have a politician strong enough in the UK to lead us away from this infestation"
"They cause mayhem wherever they decide to invade"
Other quotes in the dossier, passed to ITV News by social media user Jacob Mates, called Muslims "aliens" and "radicals", with one saying "their plan is to turn this country into an Islamic state".
While there have been allegations of Islamophobia within the Tory party, claims of anti-Semitism within Labour ranks have been continuing for months.