The debate is the direct result of an online petition which has garnered more than 574,000 signatures but the government, which has the ultimate say, has already said it will not go ahead with any ban.
British lawmakers are obliged to consider for debate any petition on the government's official petitions website that reaches 100,000 signatures.
Prime Minister David Cameron has called the outspoken billionaire's remarks on Muslims "divisive, stupid and wrong" but said he was opposed to a ban.
No decisions are going to be taken at the end of the debate, for which three hours have been allocated.
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"I will question whether a ban would be possible or perhaps counter-productive in bestowing victimhood on Mr Trump that could advantage him in the opinion of Americans," Labour MP Paul Flynn, who will lead the debate, said on his website ahead of the debate.
"I will urge that we treat him with courtesy inviting him here to show us where the UK 'no-go' areas are for police, introducing him to centres of racial harmony in Wales and England, discussing our 24 deaths from gunshots per year compared with 160 this year in the US," he said.
Some 40,000 people have also signed a petition calling for Trump not to be barred, saying comments made on the US election trail do not concern Britain and citing possible complications to future US-British ties.
The government has blocked some controversial figures from entering Britain due to concerns about hate speech.
Trump is the frontrunner in the race to win the Republican nomination for the US 2016 presidential election, and has suggested banning Muslims from entering the United States and labelled Mexican immigrants rapists and drug dealers.
Sarah Malone, executive vice president of Trump International Golf Links, said: "It is absurd that valuable parliamentary time is being wasted.