BACKGROUND: Inappropriate dispensing of antibiotics at community pharmacies is an important driver of antimicrobial resistance (AMR), particularly in low- and middle-income countries. Thus, a better understanding of dispensing practices is crucial to inform national, regional, and global responses to AMR. This requires careful examination of the interactions between vendors and clients, sensitive to the context in which these interactions take place. METHODS: In 2019, we conducted a qualitative study to examine antibiotic dispensing practices and associated drivers in Indonesia, where self-medication with antibiotics purchased at community pharmacies and drug stores is widespread. Data collection involved 59 in-depth interviews with staff at pharmacies and drug stores (n = 31) and their clients (n = 28), conducted in an urban (Bekasi) and a semi-rural location (Tabalong) to capture different markets and different contexts of access to medicines. Interview transcripts were analysed using thematic content analysis. RESULTS: A common dispensing pattern was the direct request of antibiotics by clients, who walked into pharmacies or drug stores and asked for antibiotics without prescription, either by their generic/brand name or by showing an empty package or sample. A less common pattern was recommendation to use antibiotics by the vendor after the patient presented with symptoms. Drivers of inappropriate antibiotic dispensing included poor knowledge of antibiotics and AMR, financial incentives to maximise medicine sales in an increasingly competitive market, the unintended effects of health policy reforms to make antibiotics and other essential medicines freely available to all, and weak regulatory enforcement. CONCLUSIONS: Inappropriate dispensing of antibiotics in community pharmacies and drug stores is the outcome of complex interactions between vendors and clients, shaped by wider and changing socio-economic processes. In Indonesia, as in many other LMICs with large and informal private sectors, concerted action should be taken to engage such providers in plans to reduce AMR. This would help avert unintended effects of market competition and adverse policy outcomes, as observed in this study.