Indonesia is a rapidly growing middle-income country with 262 million inhabitants from more than 300 ethnic and 730 language groups spread over 17 744 islands, and presents unique challenges for health systems and universal health coverage (UHC). From 1960 to 2001, the centralised health system of Indonesia made gains as medical care infrastructure grew from virtually no primary health centres to 20 900 centres. Life expectancy improved from 48 to 69 years, infant mortality decreased from 76 deaths per 1000 livebirths to 23 per 1000, and the total fertility rate decreased from 5·61 to 2·11. However, gains across the country were starkly uneven with major health gaps, such as the stagnant maternal mortality of around 300 deaths per 100 000 livebirths, and minimal change in neonatal mortality. The centralised one size fits all approach did not address the complexity and diversity in population density and dispersion across islands, diets, diseases, local living styles, health beliefs, human development, and community participation. Decentralisation of governance to 354 districts in 2001, and currently 514 districts, further increased health system heterogeneity and exacerbated equity gaps. The novel UHC system introduced in 2014 focused on accommodating diversity with flexible and adaptive implementation features and quick evidence-driven decisions based on changing needs. The UHC system grew rapidly and covers 203 million people, the largest single-payer scheme in the world, and has improved health equity and service access. With early success, challenges have emerged, such as the so-called missing-middle group, a term used to designate the smaller number of people who have enrolled in UHC in wealth quintiles Q2–Q3 than in other quintiles, and the low UHC coverage of children from birth to age 4 years. Moreover, high costs for non-communicable diseases warrant new features for prevention and promotion of healthy lifestyles, and investment in a robust integrated digital health-information system for front-line health workers is crucial for impact and sustainability. This Review describes the innovative UHC initiative of Indonesia along with the future roadmap required to meet sustainable development goals by 2030.