Background: Diarrhea remains a major cause of child morbidity and mortality in low- and middle-income countries. Reliable data on the economic burden of diarrhea is required to support the selection of appropriate health intervention programs. This study aimed to estimate the costs of acute diarrhea in children under five years of age in Indonesia, a large middle-income country with a substantial diarrheal burden. Methods: Direct medical cost data were extracted retrospectively for 1050 children under five years of age with acute diarrhea receiving inpatient care across 45 health facilities in seven Indonesian provinces during 2017–2020. Direct medical costs for children treated in outpatient settings were estimated by collecting unit costs associated with standard diarrhea case management in children. A structured interview of 240 caregivers of inpatients was also conducted retrospectively to estimate direct non-medical costs as well as indirect costs from caregiver income loss. Results: The weighted average direct medical cost for treatment of acute diarrhea as an inpatient and outpatient across health facility types was US$99.8 (SD±$56.8)(35% room costs, 29% professional fees, 26% medication costs, 10% diagnostic costs) and US$7.6 (SD±$4.3) (34% diagnostic costs, 28% medication costs, 27% professional fees, 10% registration fees), respectively. The average direct non-medical household cost for an acute diarrheal admission was US$4.90 and the indirect cost was US$9.90. Conclusion: There is a significant economic burden associated with acute diarrhea in children in Indonesia. This study, based on a wide variety of health care settings and geographical regions, provides data to inform the economic evaluation of rotavirus vaccines and other diarrheal prevention programs. Funding: This work was supported by a research grant from the Murdoch Children's Research Institute (MCRI) and PATH; and the Indonesian Technical Advisory Group on Immunization (ITAGI).