Despite many pessimistic expectations, the democratisation process in Indonesia has been progressing steadily over the past decade. The Indonesian political elite has crafted and stabilised a political transition mainly characterised by frequent, free and fair elections, peaceful rotations of power, effective elected officials and separation of powers, inclusive suffrage, freedom of expression, independence of the media and associational autonomy. In other words, within one decade, Indonesia has developed the main attributes of a democratic country, according to most theories of procedural democracy. However, the extent to which Indonesian democracy has been consolidated and institutionalised is another issue, which requires close examination and assessment. Does the Indonesian democracy fulfil or approximate the criteria stipulated by theorists of democratic consolidation? This article investigates the extent to which Indonesia has managed to advance its democratic transition and evaluates the prospects and challenges of democratic consolidation. In general, the article asserts that despite the persistence of a number of shortcomings, the steady progress of the Indonesian democratisation process and the consistent commitment of the principal political actors to the democratic rules of the game will likely lead to more institutionalised, policy-driven party politics and a gradual democratic consolidation in the foreseeable future.