This study examines how AI adoption influences innovative work behavior (IWB) among Indonesian teachers. It focuses on the dual pathway through which AI adoption can lead to either challenge or hindrance appraisals, depending on how teachers perceive the technology. A quantitative approach was used, with data collected from 315 teachers via an online survey. Validated instruments measured AI adoption, cognitive appraisals, organizational AI readiness, and IWB. Structural Equation Modeling with SmartPLS 4 was used to analyze direct, mediating, and moderating relationships. Findings show that AI adoption indirectly affects IWB through two distinct appraisal pathways. Teachers who see AI as a challenge are more likely to engage in innovation, while those who see it as a hindrance are less likely. Organizational AI readiness moderates these effects by strengthening the positive pathway and weakening the negative one. The study contributes to a better understanding of how psychological factors and organizational conditions shape the impact of AI on teacher innovation in Indonesian schools.