Ternate City, as one of the regions with a majority Muslim population, has a great potential for zakat which can be utilized as a pillar for strengthening the people’s economy in an effort to encourage sustainable development. Therefore, this study specifically examines the practice of zakat management, the challenges of utilizing productive zakat for empowering the people’s economy, as well as its impact on community economic empowerment as an effort to promote sustainable development in Ternate City. This research employs a descriptive qualitative approach through problem-solving. The results show that zakat management in Ternate City is carried out with full trustworthiness and professionalism. The utilization of productive zakat in Ternate City faces several challenges, including the lack of specific regulations, limited incentives for zakat management institutions, and the low public understanding of productive zakat. Furthermore, productive zakat in Ternate City can provide an impact on economic empowerment to encourage sustainable development in Ternate City. ABSTRAKKota Ternate sebagai salah satu daerah dengan mayoritas penduduk beragama Islam memiliki potensi zakat yang sangat besar yang dapat digunakan sebagai pilar penguatan ekonomi umat dalam upaya mendorong pembangunan berkelanjutan. Maka dari itu, penelitian ini secara khusus mengkaji praktik pengelolaan zakat, tantangan pendayagunaan zakat produktif terhadap permberdayaan ekonomi umat, serta dampanya terhadap pemberdayaan ekonomi umat sebagai upaya mendorong pembangunan berkelanjutan di Kota Ternate. Penelitian ini menggunakan pendekatan kualitatif deskriptif melalui pemecahan masalah. Hasil penelitian menunjukan bahwa Pengelolaan zakat di Kota Ternate dilakukan secara penuh Amanah dan professional. Pendayagunaan zakat produktif di Kota Ternate menghadapi tantangan di antaranya kurangnya regulasi yang spesifik, minimya insentif lembaga pengelola zakat serta rendahnya pemahaman masyarakat tentang zakat produktif. Selanjutnya, zakat produktif di Kota Ternate mampu memberikan dampak terhadap pemberdayaan ekonomi dalam upaya mendorong pembangunan berkelanjutan di Kota Ternate.