The 2004 tsunami had the greatest impact on Indonesia, particularly the province of Aceh. Aside from the loss of human lives, the tsunami also caused damage to infrastructures, public facilities, the fishery sector, and the loss of the mangrove forests. As a result, the economy of Aceh experienced a 15% decline in 2005. The Aceh tsunami, which took place two decades ago, aided as a starting point for the establishment of the National Disaster Management Agency (BNBP). However, the government has faced numerous challenges in its efforts to recover from the tsunami and develop resilience in areas vulnerable to disasters. This chapter tries to identify the state, gaps, and challenges in the reduction of disaster risks in Indonesia after the 2004 Aceh tsunami.