If God created man in His image, why do we not worship Him in human form?
Because the phrase is not about appearance. It means that every person is born pure, with the capacity to reflect God’s attributes.
If we take the phrase literally, every human being would be an image of God. Then we would have to worship every person, including every criminal who roams the streets. A God whose true image could look like that would not be worth believing in. So the phrase must mean something else.
The Holy Qur’an expresses the same idea so clearly that no misunderstanding can arise. God has no form that could be copied, and nothing is like Him, as the first verse above says. But He created human beings with a pure nature.
Every child comes into the world without any inherited sin. It carries within it the capacity to reflect God’s attributes, to become kind, just, merciful and truthful. In this sense man is created in the image of God. It is about attributes, not about a face or a body.
The hadith above shows what happens next. Parents shape the child, and so over the course of its life it becomes a Jew, a Christian or a follower of some other teaching. Yet the pure nature is still there. It can be nurtured or covered over.
That is why Islam does not worship God in human form. Human beings are not meant to depict God but to make His attributes visible in their own lives. That is a far greater task than any image.