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Indonesia is going through a period of rising Muslim fundamentalism, which slowly erodes the country’s tradition of respect for diversity and religious tolerance.  In this article I chart the modern history of Islam in Indonesia, from the start of the military regime of General Suharto, the New Order. The focus is on current developments, such as the drive towards regional autonomy. Regions fighting for autonomy stress their local identity which is often found in a hardline interpretation of Islam. As elsewhere, these developments have a great influence on gender relations. Although, political Islam is getting stronger in Indonesia, countertrends are also emerging. This article traces the reactions of authors working from a feminist, human rights or liberal framework towards this development. A Muslim feminist discourse is built in Indonesia around the possibility of a gender-sensitive reform of Islam incorporating women’s rights.