This book investigates Indonesia’s war on terror 2001— 2009. It asks three interrelated questions.Firstly, according to the government’s perspective, who was responsible for the major bomb attacks in Indonesia? Secondly, what sort of counterterrorism policies did the government adopt? Finally, what are the main factors that shaped the government’s counterterrorism policy during that period?To explain the Indonesian government’s counterterrorism policy, this study adopts “the logic of two-level games” (Putnam, 1988) as the theoretical framework. The model explains how domestic politics and international relations get entangled and influence the direction taken by the government’s policy. Based on the theoretical framework, government policy is a function of incentives and constraints both on the international and on the domestic level. As “the gatekeeper” between the two levels game, the government simultaneously processes these interdependent incentives and constraints in its policy decision-making. This book demonstrates that, although it never banned Al- Jamaah Al-Islamiyah (AJAI) because of domestic considerations, the government believes that the AJAI is a terrorist network mostly responsible for the consecutive bombings in Indonesia. Secondly, the present government has mostly relied on a “lawenforcement approach” in fighting the terrorist network which has been incrementally complemented with an “ideological approach” to fight religious extremism. Finally,the pathway of Indonesia’s counterterrorism policy was shaped by contradictory pressures originating from the Muslim community and human rights groups in the domestic political environment,on one hand,as well as international pressures originating from the United States and its allies, on the other hand.