Indonesia, as a Pancasila-based state, has long experienced dynamic interactions between its national legal system, rooted in the colonial legal tradition, and aspirations for incorporating Islamic legal principles into state governance. This study examines the dialectical relationship between national law and Sharia by analyzing the integration of Islamic values into contemporary public policy in Indonesia. Employing normative legal research, the study adopts conceptual, historical, and statutory approaches to investigate the transformation of Sharia from the private sphere of religious observance into the public domain of state regulation. The findings demonstrate that the integration of Islamic law has evolved from an agenda of formalizing an Islamic state toward a process of legal objectification, whereby normative Islamic values are translated into rational, inclusive, and constitutionally grounded public policies guided by the objectives of Maqāṣid al-Sharīʿah, particularly the promotion of public welfare (maṣlaḥah). This transformation is reflected in several contemporary legal frameworks, including legislation on halal product assurance, zakat management, and Islamic banking. The study concludes that Sharia and national law should not be understood as competing normative systems; rather, Islamic law functions as a substantive source of values that enriches Indonesia’s national legal order. Its integration is most effective when pursued through democratic, constitutional, and deliberative legal processes that promote social justice and accommodate the pluralistic character of Indonesian society.