The rapid development of mutual funds sales during last two years indicates the increasing interest of the investors who invested their fund in the mutual funds. According to data provided by Bapepam, as of October 2003, the capitalization of mutual funds in Indonesia is amounting of IDR 85 billion. In the mutual funds business, guaranty of investor legal protection depends on the quality and professionalism of the Investment Managers that responsible for managing the mutual funds and the custodian banks that responsible for depository of the funds and portfolios of mutual funds. Besides of that the investor's accuracy and awareness in reading and understanding mutual fund's prospectus significantly determines the security of investment in mutual funds. The major legal issues that are researched and studied in this thesis mostly related to aspects of legal protection for the investors who invested their fund in the mutual funds from improper conducts of the Investment manager who is not responsible, unprofessional and having bad manner since the successful and profitability of mutual funds business depends on the Investment Managers professionalism. Bapepam role's at the capital market regulator in inspecting and investigating the Investment Managers who violates the rule and the regulations in managing the mutual fund (mismanagement) is also an issue to be researched. And, the legal protection for the mutual funds investors based on the Capital Market Law and its implementing rules. Based on the research and study and the analysis of the issues conducted with relation to the writing of the thesis, the author came into conclusion that the legal protection for the investors who bought unit of mutual funds generally is adequate and strong. However, there are few non legal aspects need to be improved in the future.