Although Panca Jiwa has long served as the philosophical foundation of Indonesian pesantren, existing studies predominantly examine its individual values rather than explaining how these values operate as an integrated system of character formation within contemporary Islamic education. Purpose: This study aims to investigate how Panca Jiwa functions as a moral ecosystem in shaping the character of santri at Pondok Ihyaul Qur'an Nururrahman, Wagir, Malang. Methods: A qualitative case study was employed using participant observation, semi-structured interviews, and document analysis involving kiai, teachers, santri, and alumni. Data were analyzed through thematic interpretation within Bronfenbrenner's ecological systems framework. Findings: The findings demonstrate that Panca Jiwa operates as a multilayered moral ecosystem across individual, interpersonal, institutional, and societal levels. The integration of sincerity, simplicity, independence, brotherhood, and ethical freedom is reinforced through spiritual routines, communal life, student leadership, and community engagement, producing reflective, autonomous, socially responsible, and morally resilient graduates. The pesantren further adapts these values to contemporary challenges through digital ethics, inclusive dialogue, and contextual character education. Implications: These findings provide a holistic framework for faith-based character education, although the study is limited to a single pesantren. Originality: This study reconceptualizes Panca Jiwa as an integrated Moral Ecosystem Model, extending its role from a traditional ethical doctrine to a comprehensive pedagogical framework for contemporary Islamic education.