Folktale is a piece of literature in the form of traditional stories that have been conveyed by word of mouth before the writing system was developed. Folktale contains linguistic features such as words, poetic sounds, phonological patterns conveyed repeatedly or in parallel which creates an interesting rhythm. Various studies have been carried out on folktale which is rich in cultural-historical, philological, sociological and psychological aspects, which reflect very broad and multidisciplinary cultural values. However, in the field of language teaching, the potential of folktale seems to be underutilized in today's language classes. This research was conducted intensively in Indonesian language and literature classes in two learning cycles to improve students’ understanding of cultural values and develop students’ linguistic competence. The results of this study showed that students’ competencies towards local cultural values and their linguistic abilities increase after learning takes place as evidenced by the results of the students’ post-test scores. Therefore folklore should be used more comprehensively in learning Indonesian language and literatur
