Indonesia, as a multicultural nation, faces significant challenges related to intolerance based on religious, ethnic, and political differences, particularly among younger generations. This study aims to critically analyze the role of Islamic Religious Education (IRE) in fostering the values of tolerance within the context of Indonesia’s pluralistic society. Employing a descriptive qualitative approach through literature review, the research examines academic sources, curriculum documents, and survey data related to youth intolerance. The findings reveal that although Islam, both theologically and historically, upholds strong principles of tolerance, its implementation in IRE remains predominantly cognitive and legalistic, lacking sufficient emphasis on affective and social dimensions. The absence of contextual and multicultural learning models hinders the internalization of core values such as tasamuh (tolerance), ‘adl (justice), and ukhuwah (brotherhood). Data from the Setara Institute (2023) indicate that approximately 30% of Indonesian youth are classified as intolerant or vulnerable to radical ideologies. Factors such as national identity understanding, digital religious literacy, and exposure to social media significantly influence attitudes toward tolerance. Therefore, IRE must be reoriented toward cultivating tolerant character through participatory methods, the integration of religious moderation values, and teacher role-modeling. Contextual, transformative, and socially responsive Islamic education can serve as a strategic instrument in shaping a religious generation that is inclusive, humanistic, and capable of living harmoniously in a plural society.