<![CDATA[Existing accounts of pesantren leadership tend to examine the kiai in isolation and rarely explain how religious tradition and institutional expansion are held together once a pesantren operates several formal units and several leadership actors at once, leaving open the question of how such institutions avoid eroding their religious identity while they grow. This study addresses that gap by examining how the leadership of a kiai (Islamic boarding school caregiver) negotiates the tension between preserving pesantren tradition and pursuing institutional diversification at Pondok Pesantren Bustanul Falah, Banyuwangi, East Java, an institution that has expanded from religious instruction (ngaji) alone into an integrated system comprising a kindergarten (TK), a Quran-science junior high school (SMP Sains Quran), and a vocational senior high school (SMK). Using a qualitative case study design, data were collected through in-depth interviews with five key actors occupying different structural positions in the institution: the kiai/caregiver, the bu nyai (the kiai’s spouse and co-caregiver), the SMK principal, a teacher, and a pesantren administrator (pengurus). Data were analyzed thematically with reference to the full-range transformational leadership framework of Bass and Avolio. The findings show that leadership at Bustanul Falah operates through a negotiated boundary: values regarded as non-negotiable (religious devotion, akhlak, Qur’anic learning, adab, and worship habituation) are firmly preserved, while delivery methods, curricula, technology use, and organizational structure are opened to selective, deliberated adaptation. This negotiation is distributed across actors: the kiai supplies idealized influence and inspirational motivation for institutional expansion, the bu nyai anchors character formation as a counterweight to formal-academic pressures, the SMK principal exercises delegated technical authority within value-bound coordination, teachers are given space for pedagogical innovation, and administrators adopt technology selectively according to institutional benefit. The study concludes that transformational leadership in this pesantren functions less as unilateral top-down change and more as an ongoing, multi-actor negotiation that keeps tradition and innovation mutually accountable, offering a contextual elaboration of transformational leadership theory for Islamic educational institutions undergoing structural diversification.]]>
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