This paper examines the security context of the Australia-Indonesia relationship. East Asia presents a fundamental paradox for scholars of international relations. It has arguably more sources of interstate tension than any other region of the developing world. However, it has experienced no significant interstate conflict since the end of the China-Vietnam war in 1979. After briefly reviewing the principal security challenges that East Asia faces, the paper then looks at the three categories of explanations for the long peace in the region: hegemony and balancing; institutions and elite socialization; and economic interdependence.