This book provides fresh insights into the role of religious leaders in conflict transformation and peacebuilding. Based on a large dataset of interviews with Christian and Muslim leaders in Bosnia and Herzegovina, it offers a contextually rich analysis of the main post-conflict challenges: forgiveness, reconciliation, and tragic memories. Designed as an inductive, qualitative research, it also develops an integrative theoretical model of religiously-inspired engagement in conflict transformation. The work introduces a number of new concepts which are relevant for both theory and practice of peacebuilding, such as Residue of Forgiveness, Degree Zero of Reconciliation, Ecumene of Compassion, and Phantomic Memories. The book, furthermore, proposes two correlated concepts – “theological dissonance” and “pastoral optimization” – as theoretical tools to describe the interplay between moral ideals and practical limitations. The text is a valuable resource for religious and social scholars alike, especially those interested in topics of peace, conflict, and justice. From the methodological standpoint, it is an original and audacious attempt at bringing together theological, philosophical, and political narratives on conflicts and peace through the innovative use of the Grounded Theory approach.