The purpose of this paper is to analyze Indonesia-Australia university-based cooperation since the 1940s in order to inform the ways in which Indonesia-China university cooperation is taking shape. The paper argues that the increasing research interests of academics in Australia，the accumulation of research outcomes and increasing collaboration between both countries weathered the otherwise significant fluctuations in the bilateral relations. The paper also finds that the numbers of Indonesian students studying in Australia，increased since the 1950s as a consequence of Australian government scholarships，and more significantly since the 1980s，after Australian universities started to enroll more international students. In addition，much smaller，but increasing numbers of Australian university students have study experiences in Indonesia，especially since the 2000s. An overview of studies based on surveys among Indonesian students and graduates of Australian universities indicates the difficulties that students experienced in Australia. They also indicate that Australian government scholarships are difficult to associate with the broad goals of development in Indonesia and become the “soft-power” means that promoting friendly relations between Australia and Indonesia.