In 1990, 30 per cent of Indonesian population had no access to improved drinking water source. Almost 65 per cent lacked access to improved sanitation—and almost 40 per cent defecate in the open. One of the Millennium Development Goals’ objectives is to halve these numbers of disadvantaged by 2015. We explore the recent progress using World Health Organization/United Nations Children Fund report and the Indonesia’s Socio-Economic Survey. We conclude that the country still face a great challenge to meet the targets, especially on sanitation. We next illustrate the importance of these facilities by estimating their impact on diarrhoea incidence. We find that the relative importance of sanitation is higher than that of water. A household with ‘unimproved’ drinking water source is about 12 per cent more likely to have diarrhoea than that otherwise. Lacking of improved sanitation, on the other hand, makes the household member about 23–27 per cent more likely to suffer from it.