(1) Background: Amid increasing global attention to culturally responsive and inclusive education, the integration of local knowledge into higher education curricula has emerged as a critical component of educational reform, particularly in culturally distinct regions. (2) Methods: This qualitative study investigates how universities in Aceh, Indonesia, implement curriculum innovation by embedding local cultural, ecological, and philosophical values within the national Merdeka Belajar (Freedom to Learn) framework. Drawing on semi-structured interviews and focus group discussions with 100 participants, including lecturers, curriculum developers, and education policymakers, the study explores both the opportunities and constraints surrounding this integration process. (3) Results: Findings reveal that local knowledge is incorporated through thematic modules on adat (customary law), oral literature, and traditional ecology, as well as through community-based learning initiatives and assessment methods such as reflective journals and participatory mapping. However, challenges persist due to limited institutional guidelines, inadequate pedagogical training, and the constraints of standardized accreditation systems that overlook local relevance. Despite these barriers, enabling factors such as faculty autonomy, leadership support, and community collaboration have fostered innovative practices. (4) Conclusions: This study contributes to the discourse on curriculum contextualization by offering empirically grounded insights into how local knowledge can enrich higher education in underrepresented and culturally diverse regions, such as Aceh.