This research examines why traditional Islamic schools (pensantren) are flourishing rather than declining in the face of national development efforts in West Java, Indonesia. The project will test the hypothesis that traditional religions in Southeast Asia can both maintain their strength and promote development in the modern context. It will also seek to determine what historical, economic, political, and socio-cultural factors account for the pensantren's ability to grow and address development issues without losing their religious distinctiveness. The researcher hypothesizes that it is the flexibility of the Sufistic conceptual framework of traditional Islam, coupled with the centrality of the pensantren historically to Javanese village life, that has enabled the pensantren to adapt economic development goals to rural Javanese realities. The project will provide important data on the role of religion in economic development.