The fall of the New Order government in 1998 changed the landscape of Indonesian education from a highly centralized system to a decentralized one. With this paradigm shift, district governments received a transfer of power in most public sectors in 2001, including education. The central questions in this chapter are: (1) How has Indonesia managed education in the decentralization era? and (2) How has the country managed the changes so far? Four key issues are discussed, namely, new regime of standardization, school operational cost, teachers and principals, and National Exam. We argue that Indonesian educational decentralization has mostly been about legitimacy and authority dialectics between local/district and central institutions. Moving from a highly centralized system to a more locally oriented one contests the legitimacy of each actor involved, resulting in competition for resources and survival. Nevertheless, we also identified some advances in terms of social justice and student learning support in this process of decentralization.