The development of Indonesian criminal law entered a pivotal phase following the enactment of Law Number 1 of 2023 concerning the Criminal Code. Nevertheless, studies examining the direction of criminal law development through a legal policy approach remain necessary to ensure its alignment with Pancasila, constitutional principles, national legal objectives, and the needs of Indonesian society. This study aimed to analyze the legal policy approach and policy direction in national criminal law development and to formulate an ideal direction for criminal law development. This study employed a qualitative approach using normative legal research through a literature review. Primary, secondary, and tertiary legal materials were purposively selected based on their relevance to legal policy, criminal law development and reform, Pancasila, and national legal objectives. The legal materials were systematically collected through literature and document reviews and subsequently analyzed using qualitative descriptive analysis with statutory, conceptual, and philosophical approaches. The results showed that legal policy occupies a strategic position in determining the direction of criminal law development because it serves not only as an instrument for formulating legislation but also as a policy framework that integrates national legal objectives, Pancasila values, constitutional principles, societal needs, and the criminal law reform agenda. The enactment of Law Number 1 of 2023 represents a concrete legal policy choice to establish a national criminal justice system that no longer relies solely on the colonial legal legacy. Such development must maintain a balance among legal certainty, justice, utility, public protection, and respect for citizens’ rights. This study emphasizes that the development of Indonesian criminal law must be consistently directed through a legal policy grounded in Pancasila, constitutional principles, societal diversity, and national legal objectives. These findings provide a theoretical contribution to the advancement of legal policy and criminal law scholarship and practical considerations for policymakers in formulating criminal law policies that are responsive, equitable, and oriented toward national interests.