According to PSAK No. 7 which refers to as the Statement of Financial Accounting Standard in Indonesian context, related party is defined as persons or entities who have some important associations with the reporting entities, hence, could have significant influences accordingly. One of such influences is on the transparency level, such as sugested by previoues studies (El-Diftar, 2016; Belev, 2003; Chakroun and Matoussi, 2012; Nekhili, et al., 2012). This study aimes to investigate whether institutional ownership has effect on transparency level in terms of disclosures of related party transcation. This study introduces two types of related parties which have not been addressed by previous studies, namely: active and passive related party. Generally, transparency regarding related party disclosure is hypothesized to be associated with institutional ownership. Using listed Indonesian companies for the period of 2012 to 2015, this study test the hypothesis usinglinear regression model. The empirical test result shows that institutional ownership has positive associations with disclosures of related party transaction. However, when the aggregate ownership was divided into two categories, the results are different: (i) passive institutional ownership shows no influence on disclosure of related party transaction; while (ii) active institutional ownership shows positive influence on disclosure of related party transaction.