Seaweed farming in Indonesia is carried out throughout much of the archipelago and is mainly undertaken by smallholder farmers. Indonesia is the largest global producer of the red seaweeds Kappaphycus and Eucheuma, which are used to produce carrageenan, and is a major producer of Gracilaria, which is used to produce agar. Seaweed farming is attractive to farmers in rural coastal communities because capital and operating costs are low, farming techniques are not technically demanding, labour requirements are relatively low (allowing farmers to engage in other livelihoods), and production cycles are short (30–45 days), providing regular income. Using reported values for seaweed-farming income, we conclude that seaweed farming can, but does not always, lift rural households above the Indonesian poverty line. In addition to direct financial benefits, seaweed farming also contributes to human and social capital within seaweed farming households and communities. Achieving continued economic and social benefits from seaweed farming will require additional policy development, as well as research and development to support improved and more consistent seaweed productivity and improved product quality at the farm level, provision of effective extension and technical support services, and diversification of the existing value chains in order to reduce the impacts of price fluctuations that are associated with limited global commodity chains.