This research presents information about South Korean direct investment in Indonesia, including the driving factors of the investment flow, the advantages obtained by both countries, and the determining factors affecting the dynamics of the investment on the 1999-2011 period. The data are analyzed by applying liberalist theories and concepts of International Relations as the main perspective, such as neoliberal theory, modernization theory, product life cycle, new international division of labor, and comparative advantages, thus forming a theoretical analysis. Comparative advantages are seen as the factor that lead South Korea to invest in Indonesia, as South Korea has the capital, and Indonesia has a lot of low wage workers. Thus, Indonesia gains the advantages to enhance their economic growth and develop their production factors through transfer of technology, and for South Korea, the advantages are low production costs and expansion of the market share. During the 1999-2011 period, the investment of South Korea in Indonesia experienced a lot of fluctuations. Besides internal conditions of each country, competition among countries in the region and international conditions also contributed to the fluctuation. During that period, several global crisis occurred, specifically the rise of world oil prices in 2005 and the global financial crisis in 2008, which affects the investment relationship between Indonesia and South Korea.