The development of Islamic finance in Indonesia has positioned profit and loss sharing as a fundamental alternative to interest-based investment systems. This study aims to analyze the implementation of profit-sharing mechanisms in various Islamic investment products, identify challenges, and provide strategic recommendations for improving effectiveness. Using a literature review approach, data were collected from academic books, research journals, regulatory reports, and fatwas issued by the National Sharia Council (DSN-MUI). The findings indicate that profit-sharing in instruments such as mudharabah deposits, musyarakah financing, Sharia mutual funds, and sukuk enhances justice, transparency, and social responsibility, while fostering public trust in Islamic financial institutions. Challenges include limited transparency, information asymmetry, and the use of fixed ratios resembling interest. Recommendations include improving financial literacy, implementing transparent accounting practices, and continuous sharia supervision. The study concludes that profit-sharing mechanisms not only serve as an ethical alternative to interest-based systems but also contribute to inclusive, fair, and sustainable economic growth.