The rapid integration of Artificial Intelligence (AI) in Islamic Religious Education (IRE) has been widely framed as a driver of efficiency and personalized learning. Yet, its epistemological and ethical implications remain underexplored. This study aims to critically examine whether AI functions as a medium of knowledge integration or instead generates ethical alienation within IRE. Employing a qualitative library research design, this study utilizes a philosophical-pedagogical approach combined with critical discourse analysis to interrogate contemporary AI-in-education literature and Islamic educational philosophy. The findings reveal that AI operates within a computational-positivistic epistemic framework that is not fully compatible with the holistic and transcendental epistemology of Islamic education. The study identifies four dimensions of ethical alienation: alienation from the substantive meaning of values, teacher–student relationality, learning community, and transcendental orientation. Furthermore, AI-driven systems tend to prioritize measurable cognitive outcomes, potentially shifting the educational objective from the formation of insan kamil to competency-based achievement. The research also highlights a fundamental tension between the Islamic project of knowledge integration and the efficiency-oriented logic of technology. As an implication, this study proposes a reflective framework grounded in maqasid al-tarbiyah, emphasizing the subordination of technology to ethical and spiritual educational goals, preservation of relational pedagogy, and participatory governance in AI implementation. These findings underscore the need for educators to develop critical literacy to evaluate AI not merely as a technical tool but as a value-laden system shaping the future of Islamic education.