In this paper, the positive prospects as well as problems of local resource management in Indonesia are presented through recent case studies in Kalimantan and the Maluku Islands. These case studies are preceded by a general discussion which lays out the rationale for local management of common property fisheries resources. Following the case studies, the paper concludes with a discussion of the opportunities and limitations associated with local fisheries management and with specific legal and policy recommendations for encouraging effective local management of fisheries resources in Indonesia. The case studies were based on field research conducted in Indonesia during 1990 and 1991. The authors discuss the functioning of local fisheries management systems in a lake and river system of West Kalimantan Province, and management systems found to operate in the Maluku Islands. Both Moluccan and Kalimantan cases demonstrate the flexibility of community management institutions responding to rapid changes in the values of locally available resources. While the Kalimantan case demonstrates an attempt to wisely manage resources in the context of increasing market-generated pressures for exploitation, the Moluccan case demonstrates the relative weakness of community management structures and the potential for ‘take-overs’ by non-local, private sector or local government elites. The two case studies demonstrate that local management systems are dynamic and under significant commercial and political pressure. The case studies also demonstrate that such systems are both dynamic and variable. The argument is made that the central government lacks both the detailed knowledge of local ecosystems and the enforcement capability necessary to effectively manage highly diverse fisheries resources in this large archipelagic nation.