Pesantren (Islamic Boarding School) has contributed to social changes in Indonesia. Pesantren as an educational institute not only provides religious education (tafaqquh fi al-din), but most importantly dakwah to instil moral and Islamic values among its students in conducting their social life, known as transformative propagation. The initial purpose of Pesantren is to internalise Islamic teachings in society, while taking into account social and cultural conditions that of the surrounding community. Therefore, not only is Pesantren known as a flexible institution, but it also has a dialectical relation. It also reconfirms the following surah: al-muhafazah 'ala al-qadim al-salih wa al-akhdu bi al-jadid al-aslah (while preserving the good-old values, also willing to adopt the new-better values). This paper discusses transformative propagation (dakwah) of Pesantren to tackle poverty through economic empowerment, to prevent violence and radicalism through the development of openness and tolerance; and to reduce social inequality through justice and gender equality.