This dissertation examines the role of traditional fisheries system with the study case of Panglima Laot (Sea Commander) System in Aceh Province of Indonesia which has been in place for over 400 years. It is a fishers’ institution which has played a dominant role in governing the fishing industry in Aceh for over four centuries. The traditional institution is composed of a loose network of localized fishers associations that follow a strict set of rules and regulations. There are currently 173 Panglima Laot in Aceh with about 400,000 members. Each Panglima Laot is located along the coastline village, estuary or a harbour. The term “Panglima Laot ” is both the name of the institution as well as the title of the elder fisherman who leads the organization. Panglima laot also played an important role in the revival of fisheries in the aftermath of the 2004 Indian Ocean tsunami. The thesis discusses the effort to recognize and the adoption of the traditional knowledge in formal fisheries management system in Indonesia. This dissertation thus a policy analysis framework, with legislative and institutional activity as the focus of analysis. Other factors are also briefly investigated including empowered communities and partnership initiatives