The development of Generative Artificial Intelligence (Generative AI) has brought significant changes to the field of education, including Islamic Religious Education (IRE). This technology offers various opportunities to enhance the effectiveness of learning through the development of teaching materials, instructional media, assessment design, personalized learning, and the promotion of students' independent learning. This study aims to analyze the opportunities, challenges, and optimization strategies for the utilization of Generative AI in Islamic Religious Education. The research employed a qualitative approach using the Narrative Literature Review method. Data were collected from relevant scientific publications indexed in Google Scholar and Garuda, focusing on literature published between 2021 and 2026. The data were analyzed using content analysis to identify the main themes related to the utilization of Generative AI in education. The findings indicate that Generative AI has considerable potential to support the teaching and learning process in Islamic Religious Education, particularly by improving teachers' work efficiency and expanding students' access to learning resources. However, its implementation still faces several challenges, including the validity of Islamic religious information, teachers' limited AI literacy, students' dependence on technology, the potential decline in critical thinking skills, and ethical issues related to AI use. Therefore, optimizing the utilization of Generative AI requires a human-centered AI approach, strengthening digital and AI literacy, verifying Islamic knowledge sources, reinforcing teachers' roles as facilitators, and integrating Islamic values into the use of technology. Through these strategies, Generative AI can be utilized more effectively, responsibly, and in alignment with the objectives of Islamic Religious Education.