Religious moderation in Islamic education focuses on developing a balanced and moderate attitude in religious practices. However, there are still many instances of extreme and intolerant religious understanding, especially in Islamic educational institutions. Therefore, values of moderation and tolerance need to be emphasized in Islamic education. One way to achieve this is by introducing contextual understanding of the Quran and Sunnah, which involves comprehensive methodology of interpretation and understanding within the educational context. Consequently, society can understand the importance of moderate attitudes and respect for religious diversity, and build a tolerant, harmonious, and peaceful society. Islamic educational institutions should also consider the social and cultural context of the surrounding community and introduce an inclusive understanding of religion. With this holistic and contextual approach, Islamic education can become an effective means of building a moderate and tolerant society.