Islamic boarding school as a native educational institution of Indonesia, has a education system. Implementation of the education system grows and builds the values of character in the nation and state. This can be proven; the life process built in Islamic boarding school contains the value of togetherness, democracy, mutual respect andtolerance among each other. This sense of togetherness and mutual respect are the foundation of the diversity of Indonesian. This condition can be established because the value of Pancasila (Five Principals) as a reflection in living life in boarding school has been implemented there for years. But now, Islamic boarding school is facing the modernization in the education system. But this change due to modernization will not diminish the value of native boarding school since the it has the elements such usIslamic scholars, the students of Islamic boarding school itself, the Quranic Yellow Book and mosques become the central of education which are deeply rooted in the system of education itself.