This study was conducted in the two teacher education colleges (CoEs) of the Royal University of Bhutan. It was intended to fill the knowledge gap of teacher educators' reactions to the Educating for Gross National Happiness (EdGNH) policy introduced in Bhutan in 2010. EdGNH is recognized as one of the most critical and comprehensive attempts to operationalize GNH in schools in Bhutan thereby making it absolutely essential to ensure that the country's education system embodies and reflects GNH values and principles. Using education as the instrument of change will ensure that GNH will survive and flourish. The research questions focus on the implementation and challenges associated with this innovation. A questionnaire was used (n = 66) followed by teaching observations with a selected sample of lecturers (n = 5) in the two CoEs. Results revealed that lecturers need to build EdGNH into their modules, upgrade their knowledge and skills about GNH values and practices, and develop the idea of tacit learning associated with EdGNH.