IntroductionHalal tourism has become one of the fastest-growing segments of the global tourism industry, driven by increasing Muslim travel demand and the growing importance of Muslim-friendly destination services. While extensive research has examined established halal tourism destinations, limited attention has been given to border regions characterized by cross-border mobility, multicultural interactions, and evolving tourism ecosystems. The Skouw Sae Border Area, located at the Indonesia–Papua New Guinea border, represents a strategically important yet underexplored destination with significant potential for halal tourism development.ObjectivesThis study aims to examine the readiness, development potential, and future prospects of halal tourism in the Skouw Sae Border Area. It also seeks to explore how infrastructure conditions, socio-economic readiness, stakeholder support, and border-region characteristics contribute to halal tourism transformation in a peripheral and multicultural destination.MethodThis study employed a qualitative research design. Data were collected through semi-structured interviews with government officials, tourism business actors, community representatives, and visitors, complemented by field observations and document analysis. The data were analyzed using thematic analysis to identify recurring patterns related to halal tourism infrastructure, socio-economic readiness, tourism attraction potential, governance capacity, and future development prospects.ResultsThe findings reveal that Skouw Sae possesses substantial potential to become a halal-friendly border destination. Accessibility, transportation infrastructure, border-crossing facilities, and security conditions were found to be highly adequate. Prayer facilities are available, although ablution facilities remain limited. The principal weaknesses include the absence of halal-certified culinary services and inconsistent sanitation standards in market areas. The study also found strong community support, positive attitudes among local entrepreneurs toward halal certification, and increasing visitor flows. The destination’s distinctive borderland characteristics, including cross-border mobility and multicultural interactions, further enhance its tourism attractiveness and development potential.ImplicationsThe findings suggest that successful halal tourism transformation in border regions requires an integrated approach combining infrastructure development, halal certification, sanitation improvement, stakeholder collaboration, and adaptive governance. The study highlights the importance of incorporating border-region dynamics into tourism planning and demonstrates how halal tourism can support economic diversification, cultural exchange, and regional development in peripheral areas.Originality/NoveltyThis study contributes to the halal tourism literature by extending analysis beyond established destinations to an international border region. It integrates halal tourism, destination competitiveness, governance, and border tourism perspectives to propose a border-region approach to halal tourism development. The findings provide new empirical evidence on how cross-border mobility, multicultural interaction, and governance capacity influence halal tourism transformation in emerging destinations.