INTERNALIZATION POLICY OF ISLAMIC VALUES IN THE FORMATION OF RELIGIOUS STUDENTS CULTURE. This study aims to determine how to find out the background of LPSI policy formulation, the method of internalization of Islamic values and the process of creating a student's religious culture. In the implementation used qualitative approach with the techniques of interview, documentation, and observation, data analysis using qualitative descriptive technique. The result of the research showed that the background of LPSI policy formulation was based on the mission of the institution and 3 reasons for the establishment of LPSI, namely: (1) the theological reason of al-amr bi al-ma'ruf wa an-nahy 'an al-munkar; (2) objective sociological reasons that encourage indakwah islamiyah; And (3) reasons for structural responsibility as Muhammadiyah universities. The internalization methods used were: (1) the academic domain, through the courses of Al-Islam and Kemuhammadiyahan (AIK) and the certification of lecturers, and the reference equation. (2) non-academic sphere, LPSI cooperated with student organizations in the form of studies, training and Islamic competitions. The process of creating a student's religious culture began with the vision, mission and objectives of LPSI which then breakdown into several policies: first, it was obligatory to follow AIK courses and certification (dimension of aqidah). Secondly, it is obligatory to follow the Qur'an Reading Test (TBQ) and the guidance of Qur'anic tahsinul (syari'ah dimension). (3) the obligation of wearing syar’i dress (moral dimension) with a structural model (top-down).