Despite Indonesia’s adoption of Western governance models, pesantren (traditional Islamic boarding schools) continue to serve as vital centres for both education and social services. These institutions embody Islamic public administration principles through their emphasis on moral, ethical, and spiritual development, community service, and leadership. In particular, this chapter investigates how pesantren contribute significantly to local economic development, public service provision, and climate change mitigation through eco-pesantren initiatives. Our study, based on qualitative research including desk studies, fieldwork, and focus group discussions, highlights the unique role pesantren play in fostering community well-being and sustainable development. The findings underscore the importance of recognising indigenous institutions like pesantren in shaping governance that aligns with local cultural and religious contexts, while also addressing contemporary global challenges such as economic inequality and environmental degradation. © Editors and Contributors Severally 2025.