This paper examines the problem of aflatoxin in Indonesian peanuts and discusses potential initiatives to minimize contamination at pre and postharvest stages. The research uses data from 62 farmers, penebas, collectors, processors and retailers in Pati Regency, Central Java, during the wet and dry seasons in 2002. The findings revealed that the highest percentages of samples infected by Aspergillus flavus (100 per cent in both seasons) and contaminated by aflatoxin (2-124 and <4-342 ppb during wet and dry seasons, respectively) were found in raw kernels of peanuts collected from retailers in traditional markets. It found that pre and postharvest handling methods prior to peanuts being delivered to retailers (especially at the retailer level in traditional markets) severely impact on aflatoxin contamination levels in the Indonesian food chain. The authors present a number of pre and postharvest practices to help minimize aflatoxin contamination in Indonesian peanuts. Critical to further development of this work is a concentrated effort to monitor postharvest handling methods by farmers, collectors and retailers in traditional markets and identify the critical control points for potential changes needed in their procedures.