This article aims at scrutinising the Yusuf Qardhawi's thought on the concept of al-Daulah al-Shar'iyyah al-Dustῡriyyah and its relevance in dealing with the development of the concept of Indonesian polity. To be more specifically, this study elaborates the concept of al-Daulah al-Shar'iyyah al-Dustῡriyyah and its relation to the enforcement of Islamic law (sharī’ah) in Indonesia. Obviously that scholars have produced some studies on Islam and the state (daulah) from various approaches and perspectives. However, the specific and in-depth research on the concept of al-Daulah mainly initiated by Yusuf Qardhawi has seemed to be a rare topic of academic research. Accordingly, this article examines the topic comprehensively without neglecting the Indonesian context. This article argues that Indonesia as a state has accommodated the principles of al-Daulah al-Shar'iyyah al-Dustῡriyyah, which substantially has appreciated universal values of sharī’ah (al-maṣlaḥah al-'ammah). Yet, those values such as freedom, justice and equality, in practice, have been still not fully enforced. Although Indonesia has been claimed as the Pancasila democracy-based country, violations of the values are still rife.