The rapid flow of globalization significantly impacts the cultural identity and literacy of the younger generation. Integrating folklore into educational curricula offers a strategic approach to preserving cultural heritage while enhancing language learning and social skills. This Systematic Literature Review explores pedagogical strategies used to integrate folklore into learning environments and evaluates its impact on students' motivation, cultural literacy, and linguistic proficiency. Adhering to the PRISMA 2020 guidelines, a comprehensive search was conducted on the Scopus database. Six empirical studies published between 2017 and 2026 met the rigorous inclusion criteria and were analyzed using thematic synthesis. Findings reveal four primary outcomes. First, modernizing folklore through digital media yields high validity and practicality. Second, folklore interventions significantly elevate cultural literacy and cultivate prosocial characteristics like empathy. Third, utilizing familiar cultural narratives effectively accelerates receptive linguistic skills, particularly reading comprehension. Finally, folklore-based learning consistently escalates students' cognitive motivation and emotional engagement. Integrating folklore into education is a transformative pedagogical strategy. It bridges the gap between traditional wisdom and modern instructional design to foster learners with strong moral character, deep cultural appreciation, and advanced linguistic capabilities.