This study examines how pesantren cultural values are integrated into madrasah organizational development and how this integration shapes human service quality in Islamic education. Rather than assuming these values as inherently beneficial, the study critically explores both their enabling and constraining roles within contemporary organizational settings. The research positions madrasah as a faith-based human service system that seeks to balance moral formation, institutional accountability, and community well-being amid increasing bureaucratic demands. A qualitative case study was conducted at MA NU Banat Kudus, Indonesia, employing in-depth interviews, participant observation, and document analysis. Thematic analysis was applied through an iterative coding process to trace how values were articulated by participants and enacted in concrete organizational practices. Findings indicate that core pesantren values ikhlas (sincerity), ukhuwah (solidarity), ta’dzim (respect), and istiqamah (discipline) are embedded in leadership practices, collegial collaboration, and pedagogical interactions. These values contribute to organizational commitment, teamwork, and moral responsibility, while also generating tensions related to hierarchy, participation, and professional expectations. Their integration supports institutional cohesion and service delivery, yet requires continuous negotiation to avoid rigidity and excessive moral pressure. The study demonstrates that pesantren ethics function as a culturally grounded ethical framework that both enables and shapes leadership integrity, social accountability, and human service effectiveness in faith-based educational institutions. The findings extend human service theory by illustrating how local spiritual values operate as context-dependent organizational resources, informing but not replacing modern principles of sustainable and participatory organizational development in Asian educational contexts.