Ethnically it is highly diverse, with more than 300 local languages. The people range from rural hunter-gatherers to a modern urban elite.
Indonesia has seen great turmoil in recent years, having faced the Asian financial crisis, the fall of President Suharto after 32 years in office, the first free elections since the 1960s, the loss of East Timor, independence demands from restive provinces, bloody ethnic and religious conflict and a devastating tsunami.
Sophisticated kingdoms existed before the arrival of the Dutch, who consolidated their hold over two centuries, eventually uniting the archipelago in around 1900.
After Japan's wartime occupation ended, independence was proclaimed in 1945 by Sukarno, the independence movement's leader. The Dutch transferred sovereignty in 1949 after an armed struggle.
Long-term leader General Suharto came to power in the wake of an abortive coup in 1965. He imposed authoritarian rule while allowing technocrats to run the economy with considerable success.
But his policy of allowing army involvement in all levels of government, down to village level, fostered corruption. His "transmigration" programmes - which moved large numbers of landless farmers from Java to other parts of the country - fanned ethnic conflict.
Suharto fell from power after riots in 1998 and escaped efforts to bring him to justice for decades of dictatorship.
Post-Suharto Indonesia has made the transition to democracy. Power has been devolved away from the central government and the first direct presidential elections were held in 2004.
But the country faces demands for independence in several provinces, where secessionists have been encouraged by East Timor's 1999 success in breaking away after a traumatic 25 years of occupation.
Militant Islamic groups have flexed their muscles over the past few years. Some have been accused of having links with Osama Bin Laden's al-Qaeda organisation, including the group blamed for the 2002 Bali bombings, which killed 202 people.
Lying near the intersection of shifting tectonic plates, Indonesia is prone to earthquakes and volcanic eruptions. A powerful undersea quake in late 2004 sent massive waves crashing into coastal areas of Sumatra, and into coastal communities across south and east Asia. The disaster left more than 220,000 Indonesians dead or missing.
Facts
* Full name: Republic of Indonesia
* Population: 232 million (UN, 2010)
* Capital: Jakarta
* Area: 1.9 million sq km (742,308 sq miles)
* Major languages: Indonesian, 300 regional languages
* Major religion: Islam
* Life expectancy: 68 years (men), 72 years (women) (UN)
* Monetary unit: 1 rupiah (Rp)
* Main exports: Oil and gas, plywood, textiles, rubber, palm oil
* GNI per capita: US $2,500 (World Bank, 2010)
* Internet domain:.id
* International dialling code: +62
Leaders
President: Susilo Bambang Yudhoyono
Former army general Susilo Bambang Yudhoyono won Indonesia's first-ever direct presidential elections in September 2004, in what was hailed as the first peaceful transition of power in Indonesia's history.
He was re-elected in July 2009 in a landslide victory on the back of improved security and strong growth in Southeast Asia's biggest economy.
Mr Yudhoyono has cultivated an image as a tough and dedicated corruption fighter with high moral integrity; pledges to crack down even harder on corruption were one of the main planks of his 2009 election campaign.
However, his failure to take a firmer line against two officials at the centre of a high-level corruption scandal that broke towards the end of 2009 raised questions about his commitment to root out graft in Indonesia.
He is credited with having ushered in an era of financial and political stability, restoring economic growth as the country slowly recovered from the devastating Asian financial crisis of 1997-98.
The global financial crisis of 2008-9 did not hit Indonesia as badly as some of its neighbours, though millions of Indonesian citizens still live under the poverty line.
A former security minister in the Megawati government, Mr Yudhoyono has identified the fight against terrorism as a key challenge. As security minister he spearheaded operations to capture the Islamic extremists blamed for the 2002 Bali nightclub bombings.
The first year of Mr Yudhoyono's first term brought perhaps his biggest challenge, the 2004 Asian tsunami disaster. His administration also won international plaudits for signing a peace deal in 2005 with separatist rebels in Aceh province.
His Democratic Party emerged from the April 2009 parliamentary elections as the largest party.
Mr Yudhoyono, a fluent English speaker, studied for his master's degree in the US. Rising through the ranks under former President Suharto, he led his country's peacekeeping contingent in Bosnia in the 1990s.
Mr Yudhoyono also completed several tours of duty in the Indonesian-occupied East Timor.
Married with two sons, the president has released several albums featuring his own love songs, some of them now covered by Indonesian boy bands.
From : BBC News
