The increasing diversity of students’ religious backgrounds highlights the need for Islamic Religious Education (PAI) to move beyond religious knowledge transmission toward the internalization of values that support tolerance, respect, and peaceful coexistence. This study examines how the teacher PAI internalize religious moderation values and how these values are reinforced through school culture. A qualitative descriptive approach was employed through observations, in-depth interviews, and documentation, involving the PAI teacher as the primary informant, supported by the school principal and learning documentation. Data were analyzed using the interactive model of Miles, Huberman, and Saldaña through data condensation, data display, and conclusion drawing and verification. The findings indicate that religious moderation may be internalized through classroom instruction, teacher role modeling, religious habituation, dialogic conflict resolution, and collaboration among teachers, guidance and counseling personnel, and parents. The values emphasized include tolerance, mutual respect, peaceful coexistence, nationalism, and appreciation of religious diversity. Theoretically, this study contributes to Islamic educational scholarship by conceptualizing religious moderation as an integrated pedagogical and cultural process that connects religious knowledge with students’ lived experiences. Practically, the findings suggest the importance of integrating moderation values into instruction, curriculum design, and school culture while strengthening collaboration among teachers, counselors, and parents. Thus, religious moderation is not merely an instructional objective but a continuous process of character formation.