<p>Character education is a new term intended to replace moral education in national education curricula. Moral education has failed as indicated by rising numbers of crimes committed by students. Indonesian government specifically Ministry of Education and Culture (MEC) believes that character education will provide solution to address issues of national moralities. This dissertation intended to understand underlying concepts of MEC character education in terms of its legal sources, backgrounds, aims, expected character, value sources, and practical applications. These concepts were being analyzed and viewed using prism of Islamic education principles. Moreover, historical analyses were performed to understand causes and circumstances leading to emergence of character education. Research method in this dissertation used qualitative approach of in depth literature review. Data were organized and compiled from legal documents legitimizing MEC character education as well as MEC official books serving as guidance for implementation. This study discovered following points. First, ‘akhlaq’ instead of ‘character’ is a term used in UUD 45 (Indonesian State Constitution) and UU No. 20/2003 (State Law stating National Education System), which bears different implications. Second, MEC endorsed value relativism and let teachers or schools to adopt different values. Third, MEC applied indoctrination method for all ages to inculcate character education. In conclusion, this study offers alternative model of character education that is aligned to principles of akhlaq as follows. First, seeking pleasure of Allah being ultimate end. Second, paying attention to thinking maturity. Third, incorporating emotional quotient. Fourth, practicing akhlaq as role model and habits. Five, fulfilling basic needs. Lastly, prioritizing values. This model may serve as input to address character education issues in Indonesia.</p><p class="keywords">Keywords— education concept, education objectives, Islamic education, character education, character, akhlaq, values, morality</p>