This chapter investigates the integration of Artificial Intelligence (AI) in Religious Education (RE), a field traditionally rooted in spiritual formation and human interaction. Amid increasing digital transformation in education, theological institutions are exploring AI tools for teaching, assessment, and pastoral engagement. Using a critical literature review and analysis of institutional case studies, the paper examines the historical development of AI in education, current applications in general and theological contexts, and the ethical challenges it introduces, especially regarding decision making, data privacy, and bias as well as didactically grounded opportunities such as AI-mediated dialogic simulations. The chapter identifies both the pedagogical advantages of AI, such as personalization and administrative efficiency, and the risks of theological distortion, overreliance, and epistemic conformity. It presents a range of real-world implementations from institutions like Harvard Divinity School and the Oxford Centre for Digital Theology, highlighting best practices and cautionary approaches. The findings suggest that AI can enrich RE when deployed thoughtfully and ethically, but it must not replace the relational and formational aspects central to RE. The paper concludes by recommending policy development, ethical oversight, and interdisciplinary collaboration to guide responsible integration. This research contributes to the growing discourse on how AI can be aligned with the spiritual and intellectual goals of RE in a rapidly evolving digital age.