Islamic Religious Education (PAI) plays a strategic role in fostering students' character by promoting religious moderation, tolerance, and peaceful coexistence in a pluralistic society. However, the needs assessment conducted at SMPN Satu Atap 01 Pulau Pari revealed that PAI learning remained predominantly cognitive-oriented, with limited integration of religious moderation values and anti-bullying education. The geographical characteristics of the island area also limit teachers' access to educational innovation and professional development. This community service program aimed to develop and implement a religious moderation-based PAI learning model to strengthen students' tolerance and anti-bullying attitudes while improving teachers' competence in designing contextual and inclusive learning. The program employed a Participatory Action Approach integrated with capacity building, development, implementation, evaluation, and sustainability approaches. Activities included needs assessment, instructional model development, teacher training, classroom implementation, mentoring, monitoring, and evaluation. The program resulted in improved teacher competence in integrating religious moderation into classroom learning, the development of learning modules and assessment instruments, and strengthened school commitment to fostering an inclusive, tolerant, and bullying-free learning environment. The developed model is expected to serve as a best practice that can be replicated in other schools, particularly those located in island and disadvantaged areas.