Indonesia has appeared to be an oil dependent society in the last four decades. However, Indonesia experienced a status change from oil net exporter to net importer in 2004. These factors created awareness in Indonesia to develop renewable energy sources. Biofuel is one of the most potential renewable resources in the country. The development of biofuel technology in Indonesia has experienced dynamics in a relatively short period of time. The acknowledgement of biofuel technology in the country started in the year 2006, the technology was developed and had its peak on the year 2008, and has slowed down since 2009. Many companies closed down their production activities, leaving the production of biofuel technology in Indonesia to half of the installed capacity. The main objective of this research is to analyse the development of biofuel technology in Indonesia. The defined research question is: What are the factors that hamper and boost the biofuel technology development in Indonesia? The Multilevel Perspective and the Functions of Innovation System approach were chosen to be the theoretical frameworks. The framework Multilevel Perspective (MLP) is utilised to analyse the level of entrenchment of the technology in regards to its development in the technical and social context. The Functions of Innovation System (FIS) is utilised to capture and analyse the dynamics that occur in the process of technology development. The FIS functions that are utilised are: Creating adaptive capacity, Knowledge diffusion through networks and Knowledge development, Guidance of the search, Creation of legitimacy, Resource mobilisation, Market formation, and Entrepreneurial activity. Furthermore, the two frameworks are combined. The purpose of this combined framework is to analyse how the dynamics of the technology development process influence the interaction between the embedded technology and the surrounding and to analyse the dynamics within the technology and its environment influence the development of the technology. There are three different stages of development can be defined for biofuel technology: commercial production, agriculture development, and research and development stages. Biodiesel from palm oil is the type of biofuel technology that exists at a commercial stage in Indonesia. Biodiesel from Jatropha as well as first generation bioethanol are currently in the agriculture development stages. Lastly, the second generation of bioethanol and biodiesel are still in the research and development stages. Government, research institutes, NGOs and companies are involved in the development of biofuel technology. The Ministry of Energy and Mineral Resources through the Directorate General of New Energy, Renewable Energy, and Energy Conservation is the main governmental actor to define and impose policies and regulations regarding biofuel technology in Indonesia. The utilisation of MLP framework in the analysis reveals that biofuel technology is still in the niche level of development. However, depending on the level of development, some types or generations of biofuel technology have to interact with actors from the agriculture and the energy regime. Biodiesel from palm oil, however, has reached the agriculture regime and furthermore the development of the technology has required interactions from the energy regime. Biodiesel from Jatropha as well as the first generation of bioethanol has developed to the stage where interaction with agriculture regime is necessary. Furthermore, the second generation bioethanol and biodiesel is currently in the niches, where the technology is being developed in protected spaces created mainly by researchers and scientists. The FIS analysis suggests that all FIS functions are available in Indonesia, with different levels of fulfilment. The existence of all functions contributes to the development of biofuel technology in Indonesia. The only significant flaw from the performed functions is the Resource Mobilisation that fails to mobilise the feedstock from agriculture sector to the biofuel producers. Furthermore, interactions between the FIS function are not well developed. Because of these weak interactions, the issue of sustainability in general and of biofuels in particular is not constantly on the political agenda, which causes inconsistencies in policies and the rise of negative views on the technology. These negative views, which are related to function Creation of Legitimacy, and the policy inconsistencies, which is related to function Market Formation hamper the technology development. The application of combined framework indicates that regarding biofuel technology development in Indonesia the FIS functions Knowledge Diffusion through Networks and Knowledge Development, Creation of Legitimacy, and Guidance of the Search are performed mainly only in the niches. The FIS functions Creating Adaptive Capacity and Resource Mobilisation are mainly related to the agriculture regime. The FIS functions Market Formation and Entrepreneurial Activity are mainly related to the energy regime. Lastly, the main recommendation for companies and governments is to ensure that all aspects related to biofuel are assessed and taken into account in all functions they performed. This would help the connection between one function and another to become more aligned. If the interactions between the functions are strong, the system can develop a stronger virtuous cycle that would enable a greater technology development.